sammyg123

What a Week for Financials and Precious Metals

Option market seems to think GDX moves into the 50's by May. Perhaps this is a little optimistic? I suppose gold bullion stabilizes in the 900's, this might happen.

Global Precious Metals Correction: Healthy and Overdue

Quote from article: "Short positions in COMEX gold and silver have kept rising through the latest record advances. Who are those "investors" that can afford to short such markets without running into serious margin calls?

Secular bull markets do end. They also have corrections. It's hard to be convinced that the fundamentals, at this point, have really changed, however, maybe they will change, and those with more foresight than you or me have made their move and we are fools to keep our precious metals holdings in the short term.

As for me, I am not convinced that our economy is about to recover, and I am not convinced that the markets will either in the near term.

I expect there will be volatility in both directions. It does seem that the trend is broken in gold, so maybe it is best to accumulate, getting sample prices over the next few months.

I doubt your assessment that gold will reach 1200 by spring. I wouldn't mind if you were right though.

Gold and silver producers take short positions to lock in prices for their production. They can take short positions because this is the mechanism by which they deliver supply to the market. It's how they lock in profits. That's the "investors" with short positions, along with speculators who know more that we do, or are extremely lucky. Anyway, the futures markets are there for producers and consumers of the commodity, mostly. So, there's my semantic victory for the day - I object to your use of "investors with short positions." It is misleading, and lends credit to the Ben Steins in the world who think that traders like you and me control markets. Sometimes, it's actually supply and demand for the real commodity that sets the price. Go ahead, accuse me of naivete.