Wednesday, Jan 16, 2008
Who's wearing the concentrated shorts?
SilverSeek.com: Danger Zone
One for S2R1 and techieman, and anyone else interested in metals. Watch out for the concentrated shorts (who are these guys?!) - there could be blood on the carpet. Sorry if this seems a bit off the HPC topic, but all these things are related and there has been much talk of gold lately on the forum.
Posted by harold @ 11:54 AM (360 views) Add Comment
11 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. drewster said...
To summarise the article, the gold futures market is 95% driven by speculators and only 5% by real gold buyers and sellers like miners and jewellers. The writer thinks this creates a problem, but I see it as part of the return to a gold standard.
2. Ellipse said...
..idea: could they be reprensentatives of a consortium of central banks ?keeping the gold/silver prices low to offset prevent currencies deflation? (it's purely speculative and open to debate)
3. techieman said...
The article refers to the largest non commercials (i.e. non producers etc) and the fact that a small number of them account for a large short position in Gold. (actually see http://www.cftc.gov/dea/futures/deacmxlf.htm which shows the current numbers).
Im none too sure of this guys conclusions - hes basically saying that the BIG non commercials are short and a large increase will cause them to short cover or put up lots of margin, and that at a point in time they will have to buy back, causing an upward move. This would be normal but for the fact that positions are concentrated in a few hands. I dont really buy that myself, but still.
Its the change in the positions that is the issue with this indicator and why its tracked. See: http://www.investopedia.com/articles/forex/05/COTreport.asp. Particularly "Extreme positioning in the currency futures market has historically been accurate in identifying important market reversals".
4. sold 2 rent 1 said...
I have had several friends contact me in the last week about buying gold.
This suggests that there are many weak hands joining the party.
These weak hands need to be scolded before this gold party can continue.
Have now sold a third of my gold.
Of course I might be wrong, that is why I always want to remain at least 2/3 invested.
5. harold said...
"This suggests that there are many weak hands joining the party.''
True. But the vast majority in the world are still to wake up to the fact that gold is money.
6. cornishman said...
Hi techieman - you're the man! [re 'correction' in gold price]
7. techieman said...
Well not the only one who sugested it Cornish, but the problem now is gettin back in!!! Ive got no strong feelings on that at the moment. As i said before I was just applying rules - sometimes they work sometimes they dont. (http://www.amazon.co.uk/Elliott-Wave-Principle-Anniversary-Advantage/dp/0471988499/ref=sr_1_1?ie=UTF8&s=books&qid=1200497711&sr=8-1) its funny look at the comments, its like marmite i spose - you love it or you hate it!!! :-).
8. harold said...
...the problem now is gettin back in!!!
What do people reckon on this - $850?
9. hpwatcher said...
Gold sounds like another HPC. Whenever everybody piles into something, it always goes tits up!
Look at property.
10. sold 2 rent 1 said...
"What do people reckon on this - $850?"
Low 800s maybe.
hpwatcher,
Gold will be a bubble - that will crash badly - maybe even to zero - but not before 2010
11. Ellipse said...
It's a bull market, although programmed to brutally eliminate the late weak hands...