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Forget Prayer, It's Lamb Slaughter Time: A Rational Man's Response To All Time High Gold Shorts
Two days ago we suggested that "they better pray there is no short squeeze." Today, following the just released latest CFTC Commitment of Traders data which showed that the Comex gold short position grew once again to a new all time high of 79,416 shorts, all prayers are now off. If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure...
Short positions in gold have risen 25% in the last 3 weeks
Chart: Bloomberg
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Very unrealistic and overly simplistic. China's USD reserves would not become instantly worthless just because, in this fantastical blowhard example, China has all the gold. Even if that happened, it would mean a sum total of nothing to the US. You have little appreciation of finance, it seems.
China still needs a market for their goods until such time as their own population has the purchasing power to replace China's trading partners. That is a long way off. They don't buy all the gold in the world not because there is not enough available, but because they are smart enough to realize that would do them no good. The amount that they currently own is not even the combined net worth of Bill Gates, Warren Buffett, Larry Ellison and George Soros. For a nation of 1.3 billion, their gold is almost meaningless.
You realize, I hope, that not everyone walking this planet thinks gold is the be-all, end-all of human existence. If it was, it would be trading a heck of a lot higher than $1380, and I wouldn't be able to buy it in bulk at $1381 for immediate physical delivery, which I can. I've checked. China can do the same. They aren't doing it.
When China can't buy any more gold with their USD, this means permanent backwardation. Hyperinflation inmediately follows, so yes, USD becomes worthless, initially in the outside, and after a short period of time in the inside too.
China doesn't need to give away their labor force to the US. They will only do it in exchange for something. If the US can't give them anything in return, they will sell it to someone else. Or they will keep it to themselves. They don't offer tangible goods to someone who's broke.
You keep measuring the net worth of people in USD. When the USD is gone, things will be readjusted.
Gold is not the ultimate asset, but it's the only widely acknowledged form of money in existance. Humanity will continue to use it, because it is money. The price of the promise to deliver gold in USD has nothing to do with that. It's only a promise after all. If it wasn't a promise but the real thing, there wouldn't be any price for you to quote.
not to defend roadside shitting or 'american' views but I think we can't really be sure what cards China is holding.
India's a neo-liberal hellhole that was dumb enough to listen to whatever anyone told them to do. They ignored the entire basis of their founding and it's literally one of the most corrupt countries in the world with an inequality level through the roof.
As far as gold goes... Chinese are going crazy this weekend about it. At 272 RMB a gram, my inlaws proudly called up saying they bought 1kg for each of us because it's getting hard to find.
By my count, specs are net long 62,000 contracts
Here is the chart. Net speculative long positions in gold futures against the GLD.
http://3.bp.blogspot.com/-po7jsKb-KjE/UaBBo9mzjTI/AAAAAAAAC-o/MnBvuJMVGJw/s1600/20130521goldcots.png
Now! We seperate traders & savers. I love playing the drunk guy...<
Santelli, where are you? Spend whole day in the Exchange and not report unusual activities in gold trades. Or you just pepper spray for cnbc.
this tyler puts his money where his mouth is.
classic zh.
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Wow. There's a web page in need of code scrubbing.
The market seem to be totally disconnected. Physical trades with unprecidented demand but as demand increased the price went down. Its like there is a pool of gold out there that can absorb the demand in the dealer market without the impact on the futures. The paper market get flooded with sellers who can just cover later. This is just fucken dragging on. Am I the voice of capitulation. There doesn't seem to be genuine bullishness even on $25 dollar up days. Where's the enthusiasm. The JGB's and Nikkei should have sent gold up $100 interday.
Paper rehypothication? Selling the promise of a share of what they don't have and will never have to deliver? Who's looking? The Feds keep hitting the snooze button.
but with more contracts than metal would the market become bigger and more volatile. If there are so many fractional claims on hysical I would think the cracks would become more obvious as paties say fuck it, I want my metal.
Custodial accounts are settled in cash and the market goes down. wtf
If you hold gold, you don't want paper gold to go up. You want it to go down because:
- This allows you to buy more on the cheap
- This brings it closer to a complete disconnect. After the disconnect, gold will trade at its true value
If I held gold why would I want it to go down. This situation is more like punishment for those that hold. If you can yes buy more cheaply. I think letting the price run would suppress demand.
Like i said the JGB and Nikkei situation should have sent gold up 100 bucks with enthusiasm. I hear snoring. I am wondering when the disconnect happens can gold trade at all. There will be no(zero) price clearing. It doesn't make sense to me to supress the price because it encourages demand.
Somthing stinks
Your crying sounds like a day-trader hoping to turn a profit every day, week or month on physical bullion, measured in fiat dollars.
That sounds like a personal problem.
perceptive, aren't you sarcoff/
I don't win or lose any gold when USD fluctuates. I measure my worth in ounces of gold, and I have the exact same amount of gold no matter what the price of the 1 USD is.
Sure, I might be able to obtain more gold by speculating on the value of the dollar. I could buy USD when it's low, and sell it when it's high. But the problem is: low USD means a risk of default is priced in. So it's not a riskless operation. And then there's the risk of sudden disconnect happening at any time without warning, which would prevent me from turning my USD profits into gold anymore.
So I don't do any of this. When I want to speculate, I use paper only. I don't risk any of my actual money.
Wouldn't it be wise to own physical and having shorts on paper gold, at about equal value, the latter with a not too tight stoploss and regular evaluations?
That's at least how I would play...
I'm not a player/trader, just blown away that this market is such a complete zombie
Gold is virtuous, the world is not.I have lost hope in humanity
Just keep buying... just keep buying...
They will not be able to paper over and cover up the physical demand forever.
I don't know about any of you, but I buy all the way down.
They are fucking with the wrong guy.
ZH readers may like to ask HEART why he/she intentionally posts various disinfo including Boston bombing fake injuries / fake blood / crisis actors garbage which is 100% DISINFORMATION.
HEART, we are still waiting for an explanation...
(Have got screen caps so don't bother deleting your Boston posts)
.................
ZH is being targeted by FedGov spambots & human operatives saturating the comment sections with garbage and disinformation in addition to down voting certain posters.
They are not harmless trolls, they are professional operatives attempting to undermine and discredit ZH via multi nic sock puppets.
Attacking this post by constant down voting speaks for itself.
Case closed.
Stick to the subject asshole. If heart bothers u that much u need help. Maybe your disinforming?
Case closed
Fucking WOW!
Plastic dolls on ebay sell for more than gold. Does that mean people should start buying plastic dolls instead of physical gold?
The whole paper money system stopped working some time ago, and there's no been no drop off in demand for our physical gold. Quite the opposite.
This is why it's good to just ignore all the "news".
Can someone explain why the Chinese, Russians, and Indians just don't buy in the paper market and take delivery, this would stop the games in an instant and the amounts would not have to be astronomical?
They have already exited the Petrodollar trade to some degree, so why not not a joint effort to do this , the money involved split three ways would be a drop in the Ocean.
i wouldn't be so sure that that isn't exactly what is happening. they just aren't doing it in one fell swoop.
Why would anyone who wants to buy physical metal do anything to make the price go up?
Because they are interested in accumulating lots of gold over time, lower prices are a gift.
Better 1350 an ounce than 3000 an ounce which is what it would be if they called the COMEX naked short sellers.
If China accumulating gold is meaningless then why the fuck are TPTB spending decades trying to supress the price of gold and silver...if it is irrelevant. WTF countries have a gold reserve at all?
Clients Denied Gold At Major Swiss Banks
Clients are refused to take their Gold off Major Swiss Banks with silly excuses. "Client was told by a major Swiss bank that he can only take out 100,000 Swiss francs of physical gold every six months. They blamed money laundering and terrorist activity for this decision."http://homment.com/swiss-gold-banks
I certainly wouldn't bank on Gold and Silver going up. Technically, they both look very weak and have done ever since their respective highs. It'll need some huge quick move to get them back on trajectory and to date, the vast majority of the really big sudden moves have been down, down, down.
If I were a betting man I'd wait for $1275 for Gold and $18 for Silver, before I would commit to anything like an all in strategy. It will be interesting to see how it all pans out.
Betting that paper gold will go up is asking to be ripped off. The fundamental value of COMEX futures is $0. And you know the Fed is working hard at getting the price down. So you're betting against the fundamentals and against the trend. If you do that, you deserve what you will get.
Just buy physical while it's available. And when it's not, sit back and watch the house crumble.
meh. I'll take the bet. Look at the low cost of the bet:
if gold hits 2500 to 3000 by end of 2014, silver acts like a 2.5x etf or 2.0 etf (I've seen 2.7 to 4.3), so 2500/1390 to the power 2.5 x 22.36 = 97.
Now look at what slv calls out to 2015 jan cost. That's right, for something like $200 with fees out of the money you can have a call for say, strike 27 to 29. What's 97 - 29 ?
It's a shit ton (34x more) of hundred dollar fiats in your pocket and plenty ability to buy silver at the price with premium it sells for.
You lose your bet if the pm phys is up, paper is down, or dollars aren't money anymore.
That size of bet vs prospective gain is very, very attractive.
and if it's gold=3000 then slv goes to 153, 153-29 is 124 x 100, so that's 47x more fiat $100's in your pocket. For the cost of 2 of 'em.
If you want leverage, take a look at CGR (Claude Resources). Gold miner without any hedging / forward sales. Location of gold mines in Canada (nationalization more unlikely than, say, South America or South Africa).
You get about 8-fold leverage, and something with actual fundamental value (unlike COMEX futures or paper ETFs).
For your own sake, don't put your money in fake promises of gold. If you must bet on a promise, at least take a trustworthy one.
not to worry, I take delivery of gold & silver
I'll think about that.
Going to ponder over this comparison of it (chart).
The ticker you gave is the USD version , http://scharts.co/18niHTW , which is fine too but I'll have to ponder why 2011 sees gold moving up and CGR moving down. Not the kind of leveraged correlation I want if that repeats.
From what I can calculate it looks like equivalent to 18x on the downside (which is not good to buy and hold) but to the upside (2008 to march 2011) 3x. Given that performance ... I feel a little safer with SLV calls at this time but CGR on my radar just in case.
Seems like 2011 was a bad year for miners. You'll find similar effect with GDX or GDXJ.
My guess is that most of them hedged at the worst time possible, before the 2011 ramp.
CGR doesn't hedge now but they hedged in the past. I haven't reviewed their hedging history, but this explanation seems very plausible give that it would also explain similar results in GDX / GDXJ.
As for SLV calls, they're a bet on nothing. How do you know SLV shares won't become worthless this very year? The likelyhood of SLV going up again is not that far from the likelyhood of a default. Think about it...
I don't know but if it happens I'm going to be out $200/contract or less. I can live with that. I think the odds of it happening in the time-frame before expiry are less than 5%. On the other hand I think each contract will return me $3000 or more profit. I'll take that bet but I'll take delivery of silver along the way.
Something's just wrong with the miners, how they're operating, what they're returning. Of them all I'd have the most faith in Silver Wheaton or Great Panther, perhaps Franco Nevada. I'm eyeing up FNV calls for the end of the year too. The math relating correlations is subjective but I'd say for now that a gold price of 2100 could see FNV at 107 and if I went far out of thet money to pay cheap I'd get a 50.00 strike for under $200 now. I think that's also a fair bet. No money in it yet but I'm thinking about it.
if I did my math right for the break-even with fees & buy-in cost that would need FNV to hit 53 and gold spot (buy correlation) to hit 1540/oz USD. I can live with that bet (again, not in it yet).
I'm always looking for new miners for the sake of diversification. But I'm only interested in companies whose mines are 100% in countries with high legal certainty. Mexico, South America, Africa, are off-limits for me.
I think much more important than correlation, is the certainty that the gold in your mines won't be confiscated. Of course you can never be 100% sure, but when we see a COMEX default and the physical market run dry, I would be very worried about any investment I had made in Soth American mines. The temptation is just too high to let me get away with the earnings.
i am thinking that we see ANOTHER smash and grab tomorrow night --- holiday weekend, very light market...perfect for a JPM/Fed operation.
And that is what these guys are waiting for....the situation at the Comex is dire....the 'regulators" are a complete joke....the government & Fed are funding this ......its a completely rigged "market"......
so tomorrow night, gold and silver open and take 20% dives...making JPM's galactic Blythe engineered short profitable....letting these guys out at a massive profit......
of course, they will have sold all the country's gold ... and our future to China, India and Asia for pennies....but who cares? No one on Wall Street or in Washington.....
I have been saving my ammo for this......all set to buy.......and ask for delivery.
So rather than being terrorized like a good little peasant should be...I want to thank Ben, Jamie, and Blythe in advance for helping me secure my family's future. Oh, and Bart and Gary, you guys too....without your studious "we can't find a thing" pretense and complete lack of integrity, none of this would be possible.
The game very well may be sell the paper gold to smash the price, then buy as much physical you can at the depressed prices. Don't be surprised to find out Jamie and Blythe as well as china now own most of the US gold.
So... should I switch back to fysical uranium?
Would very much appreciate the opinion of zhedgers on Goldmoney.com and Bullionvault.com.
They are mean to provide audited, segregated, allocated gold and silver to the retail public, in Viamat and Brinks vaults separate from the banking system. Taking delivery is possible, but expensive.
I understand "if you don't hold it, you don't own it", but storing large volumes of silver presents it's own problems
Does the forum think they a)are legit b)Will survive the reset?
All opinions appreciated
Doesn't make sense to store silver. Store gold.
I don't think anything but direct custody will survive the reset, because there's no rule of law to enforce it.
Thanks to legal tender laws, when SHTF, your counterparty always has the choice of "losing" your gold in a tragical accident, and paying you back in FIAT at the COMEX price (which will be close to zero).
How honest would you expect your counterparty to be, in order to dismiss a fortune just to pay you back in full, without any kind of law enforcement whatsoever?
I would only trust very close friends or certain members of my own family to have this kind of honesty with me.
we have no law enforcement now, so expecting anyone to comply with anything as the grand reset progresses is just foolish.
Take delivery.
+ 1 - GoldMoney is good for very temporarily "moving" PM's internationally.
SocGen: Gold $10,000 - Stocks Crash
Gold prices will top $10,000 per ounce, the stock market will tank and Treasurys will yield less than 1 percent, Societe Generale's Albert Edwards forecast in a trademark bearish report.
http://homment.com/gold10000
LOL at social media...
http://www.bbc.co.uk/news/uk-22664835
"Three men - two from Gateshead and one from Stockton - have been arrested by Northumbria Police on suspicion of posting racist tweets ahead of a protest by the English Defence League in Newcastle."
Suspicion of posting tweets gets you arrested in the U.K.
Gotta wonder why anyone there would have an account then???
How much gold?
1 cubic centimeter of gold weighs 19.3 grams. A cube 100 cm by 100 cm by 100 cm is 1 million cubic centimeters. A cube one meter in length, height and width is going to weigh 19.3 million grams. 193,000 kg. 193 metric tons.
170,000 metric tons of gold in the entire world. 900 cubic meters will house all of the gold in the world.
1 meter by 30 meters by 30 meters, a nice sized swimming pool, and you can place all of the gold ever mined throughout all of history in that volume the size of McScrooge's swimming pool. Better add a couple of feet of reinforced concrete to the bottom of the pool.
Not that much gold for a planet 7946 miles in diameter.
1400 per ounce is cheap.
OT..hey TD's, riots for a week in stockholm, beheading in London, nothing on ZH?
19.3 million grams makes 19,300 kg
So it's more like a cube of 20m x 20m x 20m.
19 300
19.3 tons
My math was incorrect by a factor of ten.
It took BDirect 5 weeks to find the silver to ship to me. Me thinks inventories are getting rather thin.
took me 1 day from silvergoldbull
some others are telling me meritgold also is reliable
If the Morgue (Uncle SAm and his TBTJ friends) are the ones holding these shorts, two things are true. One, the paper price of gold is about to go lower and two, they are naked shorts. It's going to be a great time to purchase some physical gold soon my friends.
IMHO, anyone who's waiting for lower paper prices to buy physical is nuts. And that doesn't mean that the paper price isn't going to go lower, because I think it probably will. The time to get physical is now, at any price. Stop nickel-and-diming yourselves--pay whatever premiums you have to pay, take delivery, and forget about it...
sometimes you have to cull the herd and have lamb stew for a month.
they will always print and sell one more paper gold contract than there's demand to buy.
the game will continue until buyers demand delivery of the physical
we few, we happy few, we band of silver holders . . .
O Futuro: Gold Is All Sold Out (free access):
http://winteractionables.com/?p=2863
25 May 2013
Comex Gold Short Increases Dramatically
"One of these days we will...find ourselves staring right into God's eyes.
And the first one who blinks is going to lose his testicles."
Peter O'Toole (Dr. Harry Wolper), Creator
So guys, how good do you think that trading idea that Goldman gave you is going to get resolved?
Last one out of the pool picks up the tab." jca
http://jessescrossroadscafe.blogspot.com/
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say what you will but look at the chart in this link.
.
24 May 2013
Citi's Tom Fitzpatrick: Gold and the US Debt Limit Correlation
According to Citi's analyst Tom Fitzpatrick in his interview at King World News:
"As can be seen from the chart, Gold has never stayed below that “stairway to hell” for very long. Given that the debt limit number is going to continue higher, a re-emergence of Gold strength looks inevitable.
A lot of 'considered opinion' suggests that by the end of the present electoral term (the end of 2016 when new presidential elections take place), that the US debt limit will be at around $22 trillion USD."
Tom has a number of interesting charts which you can see at his KWN interview here.
http://jessescrossroadscafe.blogspot.com/2013/05/citis-tom-fitzpatrick-g...
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and his other post about the receding ocean is worth the time, imo.
an article about gold prices going higher with tons of comments about the paper price going lower.
Think of it like this......
real blow job vs. 'paper' blow job..........
Freegolders say they are AGAINST gold as money but that they are FOR gold at the same time.
Who is AGAINST gold or honest money?
THE BANKERS.
Fregolders say that gold is neither commodity nor money. What kind of bullshit is that?
Freegold=Freebullshit