Tag Archives: Gold market

Signs of the Gold Apocalypse: M and A and Fund Extinction, by Tom Luongo

Gold is probably oversold and is a good buy right now, at least for a trade. From Tom Luongo at tomluongo.me:

For bear markets to truly end investor sentiment has to get to a point where they would rather walk on broken glass than buy that asset or asset class.  We’re reaching that point in the precious metals market.

In conjunction with that we also have to see arrogance on the part of short-sellers convinced that all rallies will be sold, keeping a lid on prices.  It doesn’t matter if buyers come in at higher prices or above significant technical support levels, they will push because they become convinced this is a one-way trade.

We see this in the government bond markets as well.  In traderspeak it’s called the [Insert Head of Central Bank Here] Put.  The Greenspan Put begat the Bernanke Putwhich morphed into the Yellen Put.

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My Inner Contrarian Wakes Up: Gold Short Positions Hit Record, by Wolf Richter

Gold is due a pretty good rally. From Wolf Richter at wolfstreet.com:

Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years.

First things first: I want to thank the many readers who have expressed their interest in an article about my views and theories on gold and silver. In fact, the response has been so strong that I decided to cover precious metals (PMs) more broadly on WOLF STREET, but only in an unbiased and analytical way, if that is even possible.

“Gold” is subject to so much debate – and this debate is influenced by hefty agendas on all sides – that coverage attempting to stay out of this debate is going to require some stepping on toes.

We will attempt to focus on the physical metals and their derivatives (i.e., “paper gold”). But we will stay out of the debate as to whether “only gold is money,” whether the dollar, or any currency, should be backed by gold, and the like.

Yes, gold and silver markets are manipulated, up and down, but just about all markets are manipulated, and in terms of the most manipulated markets of all, gold and silver probably don’t even rank near the top. That honor would likely go to cryptos.

And in terms of magnitude, the top contenders for the most manipulated markets of all are the credit markets, including the government bond market, and the corporate bond market. Central banks manipulate credit markets explicitly and not in secret with the full power of their monetary-policy tools, such as “forward guidance,” interest rates, and QE. No other market has manipulators lined up that openly and publicly use trillions of dollars, euros, and yuan, and quadrillions of yen, to accomplish their goals – and are being hailed for it.

Our coverage of PMs will be neither perma-bullish nor perma-bearish, and neither gold bugs nor gold haters will be happy.

Today, we will kick this off with some insights into the short positions in the gold derivatives market, and what this might mean for the price of gold near-term.

Gold has had a rough time so far this year, down about 9.8% year-to-date. But today, gold jumped 1.5%, from a 20-month low, to $1,212.20 at the moment – instant reaction to Fed Chairman Jerome Powell’s speech this morning, or just a relief rally, or result of the record short-positions that have been built up?

To continue reading: My Inner Contrarian Wakes Up: Gold Short Positions Hit Record