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Gold/Mining/Energy : Precious and Base Metal Investing
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To: Ken Reidy who wrote (31719)10/23/2004 6:49:17 AM
From: Square_Dealings  Read Replies (2) of 39344
 
I agree the Kaplan piece re-hashes the "commercials are always right" theory that has prevailed for 20 years in the gold market.

Of course the commercials will use everything they have to contain the gold price because to have it get away would mean the value of the debt outstanding against gold would increase and it would encourage a flight of capital away from the "pre-approved" areas of stocks and bonds.

Many people are missing the fact that the US is not the central driver of commodities prices now. The demand and supply imbalances are being generated from Asia. If Asia and the rest of the world decides to diversify to gold the commercials in the U.S. will be run over and that is what I expect to happen at this juncture.

Just as OPEC no longer can control the oil market, COMEX will eventually be unable to control metals prices.

The current over-extended record credit position of U.S. banks may change the dynamics of the gold market and status quo of the commercials ability to control it "as usual".

As for the 80% bullish percent in precious metals he has to be pulling this one out of his rear. Most experienced metals traders remain skeptical and/or concerned as observed here on SI over the past couple months.

M
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