waldipup

Gaza War: Expect a Spike in Oil, Gold

There is no reason to make an observation that gold will rise , or that oil will rise , if the mideast conflict widens.

The current conflict is limited such that it should have little effect on either.

The likelyhood of a widening conflict based on the current circumstances are extemely low -

Virtually the same as at any other point in time.

So I dont think the premise of the article warrants it's being written in the first place.

Gold Bugs Beware

Bad link from above - If this doesn't work either , go to Resource Investor site and find Arensberg's article - worth the time.


www.resourceinvestor.c...

www.resourceinvestor.c...

Gold Bugs Beware

"Take a look at the gold COT's."

OK.

This is what I found :



See at link for full article / graphs :

www.resourceinvestor.c...


Got Gold Report – COMEX Commercials Least Net Short Gold In Years
By Gene Arensberg
10 Nov 2008 at 08:22 AM GMT-05:00

The big news this week is that the largest of the largest traders for gold futures, the commercial traders on the COMEX, are now the least net short gold they have been in years.


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ATLANTA (ResourceInvestor.com) -- Regardless of whether or not the world is near the end of the giant financial “Charlie Foxtrot” we have all endured up to now, the largest of the largest traders of gold futures now have the fewest bets that the U.S. dollar price of gold will fall further than they have had in years.

As of Tuesday, November 4, traders classed by the Commodities Futures Trading Commission (CFTC) as commercial held a collective net short position (LCNS) of just 76,406 out of a total 303,908 contracts on the COMEX, division of NYMEX in New York. A net short position means that the trader profits if the commodity goes lower in price.

Yes, the current COMEX commercial gold net short positioning is the lowest in years. Indeed, we have to go all the way back to June 7, 2005 to find a reporting week which shows a lower LCNS (67,052 then), back when gold closed at $424.87.

That doesn’t mean that gold can’t go lower still, it can. It just means that the big dogs in the futures trading arena are not positioning like they think it will. To the contrary.

More about that very interesting and potentially bullish development below in the Gold COT section, including what it might signal the commercials’ expect, but first, let’s look at the gold and silver ETFs and the CFTC Commitments of Traders Reports (COT).


With the huge disparity in Comex price (low) , and physical price (high) , I wonder if many are buying on the Comex to take delivery at a lower price-

Except that the shorts (in silver , concentrated among a few banks only ) ,

Dont have the metal to deliver?

Wha happens den?

Gold Bugs Beware

"It's hard to imagine a source of new demand entering the picture. "

How about me?

Stocks are hardly the "new flight to safety".

GS and GE may be a place to park a bit , but we aren't going to get the deal Buffet did , and I dont think they and their ilk will be the new "gold rush place to be".

Bonds may crash as interest rates rise - not right away, but I dont plan on timing it to the last second fully invested.

Foreign stocks are a good diversification tool , but as Peter Schiff has found out to his surprise , no panacea.

Nobody knows how low/how long all these entities may go , but everyone does know that gold wont disappear.

So , as I said per demand -

How about me?


"Supply"

I'm positive that you are aware , and dont you think you should have included in your supply analysis (after all , it's what you were thinking when you wrote it, I'm sure) ,

The number of new supply projects put on hold and cancelled outright as the lifeblood of the majors -

The Juniors -

Have been decimated and incapacitated to the point where expected new supply (badly needed to replace depleting resources) is not coming onstream as thought.

Note that this was not expected to be enough in the first place to replace resource inventory - now , fuggetaboutit.

Now , your point may be that supply in the nearer term is your point ,

but now we have to consider if prices will continue to drop or shoot up.

The consensus has seemed to have morphed , across the board , into something like this:

"Harrumph , gold may drop further , but even if it doesn't , it will not rise appreciably for some time , and will more likely range trade".

But the consensus is always wrong.

Where's that there $200 buck oil everyone knew was coming?

Where's that $100 buck bottom in oil everybody was talking about.

Here's a consensus :

Nobody nose nutin' .

Hold onto some gold.

Why I'm Still Holding Onto Gold

I'm holding GG since 5 Doc - have never sold one share.

I'm not smart enough to time/trade the market , so I just have to do the best I can with my limited capabilities.


GG has just broken not only its previous high , but a reverse H&S pointing to an initial goal of 55 .

Since 45 is the breakout point , it woulde be a fortuitous spot to take a shot , either now or on a later retracement back there ( to test the neckline ).

Gold itself has also broken out of a H&S bottom on Friday , with an initial goal of -

Around the all-time highs.

Buying around 920 or so is a conservative play because if the H&S breakout fails , you can exit below the neckline and consider it a conservative , low risk , low cost trade.

If the neckline holds , the breakout is valid , and the price moves up towards its tech goals , (or eventually much higher!) , you've hit a home run.

Ditto for GG.

John -

I actually understand your comment and view it less harshly than the other guys do , because your premise in general is a good one to follow.

But I believe you are underestimating the stage of the market which we are in.

EVERY bull market moves up " a lot" , but then moves up "a lot more".

You are picking a top , but it may just be a resting/correction point.

This move exceeded the 79-80 high of 800's for the first time.

So far , all it has done is continued on up from that historic breakout to 1030 , and corrected to test the 79-80 peak.

Now it has turned , to a large probability , technically bullish again.

Granted it ain't 250 anymore , but Berkshire Hathaway ain't two bucks a share anymore either , and it's been rising and rising anyway!

Ditto oil from its first peak at 80 , down to 50 -

And if you insert your comments there , guess what happened next?

Anyway , as John Fogerty said ,

It's just a thought.