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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (35383)	8/15/2005 11:35:41 AM
From: mishedlo	Respond to of 116555

Ork: Reading Noland tonight makes me think that Heinz's thesis that when gold breaks out it will run over the commercials is not too far away. Mish to Ork: FWIW (and possibly nothing) In general I do not subscribe to that theory unless and until longs are willing to take delivery. Mish to Heinz: FWIW (and possibly nothing) In general I do not subscribe to that theory unless and until longs are willing to take delivery. why am I wrong? Heinz: i didn't even know that was my thesis actually...it's of course possible that i mentioned something along those lines at some point. basically in gold, the speculative demand has to 'eat through' the commercial hedging. bull markets in gold always happen with speculators heavily engaged on the long side. for instance, the '79-'80 blow-off rally was a big defeat for the hedgers, as they were short all the way up and began to cover close to the top. i do believe something similar (and it may well involve delivery demands as you suggest - this happened in the 70's as well) will eventually happen, but for all i know it may be years away. it will only happen if it really IS a secular bull market (it very likely is one), but imo only in its final stage(s).