<If I am reading things correctly, commercial shorts are putting on enormous positions in the metals markets.>
Oil is in surplus and prices have fallen. Gold is made out of oil, which is made out of dirt, much like a cabernet sauvignon wine is made out of grapes and the grapes are made out of dirt, air and sun with a bit of chlorophyll added.
While mania is supposed to be building to reward all the non-manic current boomsters crowding the gold market, thinking they have front-run the mindless mob, perhaps the mania is in already. The price of gold is certainly above the officially globally recognized sooth line which leads to $1,727 31 Dec 2012, so it has a bit to drop before then, though not far.
The price of dirt and cost of processing of grapes and oil determines the price of wine and gold, though of course both are subject to the manias of masses. After the manias have passed, the price is the cost plus expenses and profits.
TJ is playing gold digger in Oz with expected huge returns, which means the cost of production is much lower than the price of gold. There is some mania already priced into gold. If the herds aren't stampeding and the hordes hoarding, gold prices will have to fall, not rise. Those currently in mania will start to get tired after a while. Some have obviously already tired, or got nervous, if not frightened.
Mqurice |
