SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : GOLD-XAU
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Green who wrote (762)12/20/1997 10:59:00 AM
From: Richnorth  Read Replies (1) of 1756
 
A shorter borrows the gold and sells it on the expectation he could buy it back at a lower price and thus makes a proft on the price difference less commission charges.

I suppose any net sale in in a commodity tends to drive down the price of that commodity. Likewise with gold. Shorters are much emboldened these days by the fact that CBs have been selling gold and the fact that some hedge funds and gold producers (e.g. Barrick, and Placer Dome etc)have made forward sales of gold. The collective net 'sales' of gold have been driving the price of gold down and down. As I have indicated earlier, a CB does not have to actually sell gold to cause the price to go down: an announcement ('threat') that it intends to sell is all that is needed. I believe this causes some/many investors to sell some/all of their gold to avoid keeping something of diminishing worth. Also, the very fact that CBs would sell or consider selling gold tends to strike fear into the hearts of many people, thereby causing them to shun the yellow metal. Hence the apparent absence of demand.

Lately, the price of gold has risen partly because of shortcovering and partly because some investors believe the price was right. I know that two major mutual funds have advised their clients to buy gold certificates when the pog was between $280-$285.

The demand potential for gold is strong. Many goldbugs have been waiting (goodness knows for much longer) for conditions that will make gold shine again. When this happens, there will be demand aplenty, and massive shortcovering too, both propelling the pog upward. But many shorters will end up with eggs on their faces or bite the dust.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News