Wither the Gold?
In contrast, commercials (gold producers, fabricators, financial companies, etc.), are now short 209,000 contracts, or roughly equal to the long positions held by the speculators. That is the largest commercial short position ever, and flies in the face of continued assertions that hedging is not occurring.
The net speculative long position is unsustainable, at least that has been the case historically, Money flows to gold either have to continue, or the price of gold will eventually topple under the weight of long liquidation.
Ironically, it probably would take very little to trigger a collapse in gold prices as most of the speculative funds look at technical price levels, and given the size of their commitment to the market, just a small selloff could start a cascade. The problem has been that the commercials are content to sell into rising prices, as they normally do, rather than aggressively sell into breaks, or sell to force a liquidation. We will therefore have to wait for this break to materialize on its own, but if you had enough money, you could cause it to happen fairly easily, I think.
From Mike Norman who has a good track record on gold.
My take is Gold is trending upward and broke most resistance in recent memory.
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I would look to buy gold on a dip to the natural trend line with a tight stop below. Right now. Gold is a hold if you got it, and a WAIT to buy. Not a bad short with a stop loss either.
Jack |
