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Did We Just Hit The Threshold For Short Covering In Gold?
Two weeks ago we noted something that has never happened before in gold - hedge funds, according to CFTC, had a net short position for the first in history. The past week saw a very surprising negligible shift of just 11 contracts as the short position shrank to 11,334 contracts. However, the aggregate net long position has dropped to a level that in the past has represented a threshold for signficant short-covering (21% and 17% rallies respectively). So with hedgies as short as they have ever been in history and aggregate positioning at a historically crucial level, one wonders if gold is due for a bounce...
Hedgies remain the most short they have ever been in gold...
This is what happened the last time gold saw a 'low' net long position...
and now, the aggregate net position in gold futures appears to have hit a threshold that in the past has created a significant short-covering rally...
The last 2 times aggregate net long positions were this low, gold rallied 21% and 17%...
Did we just reach that short-covering threshold once again?
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Now that I have stopped buying Au, hey, let the price go to the moon (Alice)!
But, everyone should have a position in physical gold.
You are fortunate you have reached your goal. For all others, this is not a bad entry point.
lol, a fool and his fiat are soon parted.
I'll dip my toe in below $1,000/oz.
Back in 2006 the FED was not hell bent on trying to the gold price. So I don't think the comparison today is relevant.
I think we will see a similiar case with stock markets and commodities as we did in most of 2008, right before the crash. They will all go down, so I believe there will be even better buying opportunities for physical gold and silver later this year or next year. For now, I am short paper gold (DUST) and just holding on to the physical that I already have. So I'm hoping/betting the spotprices for gold and silver will go to approx 850 USD/12 USD. With the stock market going south in Shanghai, it will soon drag the rest of the stock markets and commodities. Once these have reached bottom (or closely), gold will go non-stop up.
Also, with all the manipulation and rigging going on, the banksters and money master will probably and happily smack gold through naked short selling when things in the stock and bond markets get ugly. Sort of like a diversia; everybody is looking at the stock markets crashing, and so not anyone will react when they hammer the price of gold. "Gold is going down because investors sell in order to get liquidity". This is the kind of stuff we will be reading, when we all know it's the bankster who are just doing naked short selling. Because once the Fed goes QE5-QE10, they will want to have prepared themselves by lowering they price of gold and not scarying everybody away from the US Dollar.
There is a serious problem with low POG. To remain legit ther MUST be physical for delivery.
Already large buyers cannot get all they want (China wants 8500 tons). When small buyers can't be satisified the jig is up.
The POG can fall and may but there is only 672 tons left in GLD. where will the physical come from to satisfy the need for physical?
Yes, there is not anywhere near physical gold covering the ETF:s, such as GLD. There is also not anywhere near enough physical gold in COMEX if buyers would demand delivery. But I think that they (COMEX and the ETF) will simply deny the buyers delivery. I mean, the United States did so with Germany when they demanded delivery of their gold, so why would they treat the gold buyers at COMEX differently?
I agree...and the easy way to deny delivery is to simply close markets and cash out the holders. That way no one can complain (unless they failed to read the prospectus and they thought they were actually entitled to physical...oooops)
Exactly. And really, if they could so blatantly deny freaking GERMANY(!) of all goldholders out there, I would say there is quite a big chance/risk nobody else will se their gold for which they are entitled to in the coming years when everything goes south.
I agree that a rally is coming. BUT, sorry to point out that the previous two arrlies noted were BOTH within a longer-term declining trend so there is still a need for caution. The rally will happen because the Cartel are now long and so the next Rinse cycle will (Again) screw the Specs who will need to cover their shorts. That is what the Cartel do and IMHO it is better to TRADE with them, not against them because they OWN this market, with backing from The Fed and a Captured "Regulator".
Until the pricing of Gold is no longer determined in the paper futures markets (Where the "supply" on naked short paper Gold is infinite (Leverage at present well over 100:1) the Cartel will remain in full control. I prefer to hold physical and trade with them, using the profits to add more physical and I will continue to do that until there is evidence that THE bottom has finally been reached, which MIGHT be now but just as likely it might not. As things now stand, the next pivot point for commencing the next Wash cycle will be at around $1180-1200 depending on how quickly the Cartel take the Specs to the cleaners (Again) and how short they become and how quickly they will do that (Which will determine by how much and for how long Gold will be allowed to rebound.
Everyone should be carefully reading lasvegaspersona very carefully.
It's already in the COMEX rulebook that they can write a check vs. deliver the gold.
And GLD can affect delivery of physical gold via Comex contracts.
You can't make this shit up.
$1030ish.
lol, a fool with only fiat is retarded...fify Pubicless
I have been buying since 1981. I still buy gold once my regular living expenses are paid for. Can't imagine where else I would put my savings.
May you live long enough to hear your great-grandchildren thank you.
Yes, that is perhaps the best single thing to think about re gold: inter-generational. That's what the Old Money in Europe has done for centuries.
Jaxville: since 1985 in my case.
No way! I'd rather keep my savings in fiat and then when I die force the grandkits to pay their share of estate taxes.. before I let them get a penny. (shades of Million Dollar Bogus)
I am not yet 60 and I am on a 5-8 year retirement time frame. I can live off other assets and I have skills and , by the grace of God; good health that means I can remain productive on some level through retirement.
It will probably be fifteen years or more before I start to draw on my gold savings. I don't know what the price of gold will be then but I do know it will be very important and having it will make a huge positive difference in my standard of living.
Or hear them say granpa admit you were wrong grandma Yellen was right. Oww shit QE 101
If we were trading on fundamentals, with real price discovery, Gold and Silver would be far higher in price. Instead we have rigged markets where endless amounts of paper contracts can be sold short with full legal impunity.
One day, maybe, the paper market will finally exhaust the outer limits of leverage, and then we will see a short covering rally that will give the shorts a religious experience.
Repost
Total wealth in the world $240 trillion
Total debt in the world $220 trillion
Combined Total $460 trillion
Total gold = 171,300 tonnes or $5,507,000,000/ Troy oz
In a 100% gold backing
Without counting the total debt = 240 trillion = $43,580/oz
If we include the debt total outstanding = 460 trillion = $83,530/oz
What's surprizing is the fact that there is still physical available at that price. ($1100)
I believe that most contracts are settled in cash much higher than the contract value. Thus enticing the big players to lock immediate profits so that they have inventory showing to keep the ponzi going.
Doña K
I really like this and other arithmetic that point the way to VERY high gold prices "in due course".
FOFOA believes that BIG physical gold sales are indeed settled at higher prices than $1100...
I have seen THREE plausible-looking calculations (all different) that take gold to $40,000 - $100,000.
FOFOA seems to understand some aspects of the mkt but woefully misses others. I read FOFOA like I do a lot of the silver doctors stuff knowing most of it is conjecture and BS.
Fester
I can assure you that no feelings will be hurt if you point out where Fofoa is woefully wrong.
Is it silver that has you in disagreement?
Silver is part of it but moreso he/she/it ingores history and therefore becomes a fortune teller.
I know we can't predict the future based on the past but it a mighty good roadmap and it shouldn't be discarded.
Jim Willie is another fortune teller. Just my opinion.
The right accounting method to do that calculation is: net wealth $20tn and a gold price just over
$6k per oz.A more realistic fair value along historic trends.In stable todays dollar terms.
Don't be greedy,The wealth and the debt are phantoms only.In a fire sale you wiil lose 90%.
I'd be more than happy if gold rose to that.My only problem then is finding where I lost it.
I still wouldn't sell at that price, because the insurance value is far greater with the absolute stupidity
being displayed by TPTB and their puppets..
Winston Churchill
Jim Rickards predicts $7000 - $9000 as China continues to buy up in preparation for having enough gold reserves to roughly match the USA and Europe.
Rickards says that some version of the IMF's SDR is likely the "next currency". A lot of gold held by China gives them a proper seat at the table when the negotiations start.
I am unable to comment with authority on Rickards' ideas, but he is extremely well connected.
I said stable dollar terms.I believe he thinks the USD needs a 50% devaluation, as do I,
so his price would be about right in those circumstances.
Talk of 20-50k per oz is not realistic IMO, much as I would like it.
Welcome back Douchen,you were missed.
Me thinks negotiations is far too diplomatic a term.
Personally, I'd be wary of anyone who is 'extremely well connected' giving me the truth (all of it). Psy-ops don't operate like that.
+1. Rickards background is quite suspect. The LTCM thing especially suspect - it is the whole manipulation crowd - link below. If and when real markets are "reopened" I would expect gold and silver to jump about 10x.
http://www.gold-eagle.com/article/ltcm-boe-fiascoes-revisited
For all the illegal shenanigans and media slams you have to notice that CBs are still net buyers of physical in a pretty big way. Back in the 1920's they had a song: "He who sells what isn't his'un, must buy it back or go to prison" LOL wouldn't it be great to have the rule of law in force somewhere, somehow, across the board
38BWD22
I read everything he publishes and the only thing that bothers me about Rickards is that he IS connected, thus has a stake in keeping his own head in the trough. I suspect he is careful to not piss off TPTB because he's finely tuned into his promotion of his image of being an insider. I don't know anything just thinking aloud.
I believe something I read years ago may provide me a little guidance on future gold prices. It stated that throughout the past couple hundred years an ounce of gold would buy a finely tailored suit on Saville Row in London. A recent check showed a range of prices between $3,500 and 6,000. Some wandered on up to 10,000 but I concluded that was too far from the mean. Maybe the $7-9,000 range is more realistic. I'm confident that anything below $1,500 will be a steal before long.
So, would you say a fair value for silver then is about $1500?
$375, IF the old ratio holds.It won't though.$60 is more likely.
I've lost some silver, but sadly silver is the new copper imo.
But this is in a 90% deflation scenario? In that case $60 is equivalent to today's $600. That sounds about right.
But gold will still be around $6k per.The balnce sheet will have to balance at the start after
a reset.I had silver,before its tragic loss, but this now seems to me the way things are
heading.
Really depends if its Mad Max, or a new Bretton Woods.
Both are wrong.
The existing stock of physical is irrelevant. Only that which bids for currency counts.
did you count CB gold in there? Do you really think CBs will be sellers?
What about me? did you count me? Do you think I'll sell for some new, untested fiat?
Since the flow can't be known, calculating the correct price of gold is nearly impossible.
I'm just counting on 'higher'.
Everyone's wrong. Silver is 4x more rare than Gold.
".. one billion ounces or 31,000 tons of silver exist above ground. There are approximately 120,000 tons of gold above ground, practically all that has ever been mined. This equates to a 4:1 ratio, or four times more gold than silver existing above ground."
Of course, in reality, it will depend on how much of the precious metals are actually beiing used for commerce. It's similar to the term velocity when comparing dollars in circulation. If everyone is holding, only the highest bidder will own whatever is available. The average person will be outbid by the industrial users.
So suck it up. Buy now or forever do not hold your "piece".
They won't be getting any physical gold from the Central Bank of 38BWD22 either.
There is a lot more debt in the world than that! Murica alone has over 210 trillion USD in debt, possibly more. Part of the 1,6 quadrillion in derivatives mass is to hide the hight of the true debt of the West, and the other function is to control various markets like the gold and the silver one, FOREX, et. al. Nobody knows how much debt is hidden... concealed in the off-book accounting gimmicks (other than the insiders, of course)!
The 201 trillion figure is Kotlikoff's calculation of the net present value (NPV) of obligations. It is not debt per se. It can be though of as the check the USG would have to write today to cover all promises made less all taxes expected to be collected into the far future.
...still kinda big...
No, Kotlikoff's number is the only one which includes derivatives (which are the prime tool of debt masking, concealement). It works like this (e.g.): your big bank like Goldman takes part of the debt and puts it into interest rates swap derivatives (it's what they did with Greece and Italy; just imagine what they are doing with your Muricano debt!), and voila, via off-book, shadow accounting trick you get official debt figure lower. The debt is still there, it's just not official. It's gone to off-book shadow accounting. I believe you Westerners call that kind of deceptions "financial engeenering."
If we include the debt total outstanding = 460 trillion = $83,530/oz
And it costs how much for a mine/refiner to bring a new ounce on stream? Maybe less than $2,000.
Seems to be a disconnect.
1,100 LOLllars its a fair price is what "freemarkets" has determined.
Rightly or wrongly you might recalculate as follows:
Total world NET wealth = $20 trillion = $3,762 / 0z of gold. Probably more realistic.
@LL Agreed but remember that for every short covered there has to be a long surrendered. The Cartel (Who are net long) could hold out to hardball the short Specs, make it really painful for them to cover and allow the price to go parabolic, in the process making hundreds of Billions. But they are unlikely to do so against instructions from The Fed. The PM markets are tiny in comparison to the Fx and Derivatives markets where the same Banks are given free money to play by The Fed. So in comparison, even a quick few hundred Billion in profit for the Cartel would not be a good idea should they piss off the Fed in the process. More likely we continue with the same old, same old Wash/Rinse cycling.
This can only change either when The Fed wants to revalue its (alleged) Gold Reserves OR when the paper futures markets no longer determine the price of Gold. And there are some significant developments in respect of the latter. Until then, the Cartel OWN this market via infinite naked paper shorts dumped into the market at the quitest trading times of day and they do with the price exactly what they and The Fed want.
Who likes platinum right now?
It may be more valuable but you can't beat the color of gold. Godsend.
https://www.google.com/search?q=godesend&rlz=1C1CHWA_enUS627US628&oq=god...
Only one metal is held by the banks that will form any new currency...only one.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Read that again. And again.
Platinum is OK but you must remember that it is a rare industrial metal. It does not have near the liquidity of gold. Note the spreads that the few market makers have on it. You should also buy platinum in conjunction with palladium. The reaqson is that industrial users substitute them as the price rises against the other.
It will likely weaken as the global recession takes hold. The upside is that the recession will not last for ever. Probably a good time to accumulate but patience is key.
Yes, for the LONG-TERM Pt is probably a buy here. Don't blow all of your money on Pt now all at once, buy some now, maybe some later.
Gold should be careful people's largest holding among the PMs ($-value). But, diversification is great.
* * *
"Pt is for optimists."
- An old ZH member
"Pb is for pessimists."
^--- "Ir is cool."
These are good points. The main Pt/Pd drivers are catalytic converters and industrial catalysis (lots of petrochemical reactions go much easier or only go over Pt/Pd), so if you expect falling demand for vehicles and various and sundry chemical products (plastics, paints, etc.), they aren't the best bet. If you really want to speculate on catalytic metals, look at rhodium; sometimes the price shifts a factor of 10. If renewables get more popular there might also be an uptick in gold catalysts as gold is good for a few oxidation reactions where platinum isn't.
Silver's an interesting one as it is used in solar panels, so even when the Left is going crazy with its solar silver still has upside due to the solar subsidies they get behind. If you look at the Endangered Elements, it's worth noting that Ag and In are must-haves for current solar, and we're at risk of shortages on both. Peak Solar?
Nice but where to buy at this price?
https://www.texmetals.com/products/platinum?mode=list
You will have to phone the smaller dealers in your area. I am sure you can find a dealer with a few ounces or more for sale. My shop does not stock platinum group coins or bars but we often have something to sell that came in across the counter.
We have a 50gr Valcambi bar but it is on hold. Try these guys .....
https://online.kitco.com/buy/gold-silver-USD.html#platinum
You can buy them at APMEX but at a higher price:
http://www.apmex.com/search?q=platinum%201%20oz
https://silvergoldbull.com/platinum-bars
No coins, but Valcambi 1oz bars appear to be available still.
you can check:
https://compareplatinumprices.com/
this one is in stock:
http://www.jmbullion.com/1-oz-valcambi-platinum-bar/
bulliondirect.com...oh wait...they went BK
Look for similar news in the future. The gold market must exist but in its current form it cannot survive.
Supply story on Pt is the most compelling of all.
PGM Round Up and Smelling Another Scam in the Works:
http://winteractionables.com/?p=22713
Strikes me as a barbaric hypothesis.
Well good. I've been waiting this long. A little longer won't hurt none.
I hope they stay short for a few more months. I love stacking at $14!
:)
Stacking at $14? Everywhere I look the sellers are asking $20 an ounce. Crazy. Spot at 14 but markup almost 33% if you want to buy any.
Educate me here: if hedgies are extremely net short, doesn't that suggest it's going lower? (at least in their opinion)?
Or are they artificially depressing the paper price to scoop up physical? (planning to, what, default on the paper contracts later)?
Them being short will make it more expensive for manipulators to manipulate it down. (they have to pay the shorts too) So I guess the theory is that the manipulators are trapped and they may have to let the price rise to destroy the shorts. Unless theres insider trading between the shorts and the manipulators going on. Another possibility is the shorts may reinvest their profits in physical gold.
If you are working with the central bank, depressing the POG you can sell without worry. If the price gets so low that the market breaks (ie no physical delivery) many assume there will be massive short covering. Some of us expect the markets to close with cash settlements.
Do you really think they would allow bullion banks to fail when all they have to do end the paper market in gold? Shit, drive the price to 300 and give every one a check...then allow gold to revalue in terms of physical.
Some of us think that has been the long term plan.
Exactly the basis of my paranoia.
If the gold and silver rigging is ending, that means the dollar parasitism Ponzi system itself is ending! Happy times! Soon the world can celebrate, as at long last the great whore, the big, fat, bloodsucking parasitic beast called Murica is finally going to die! Happy times ahead indeed! :)
I would guess that the hedge funds caught on that the POG will be sold until it breaks.
Instead of having to cover, the funds will be closed and all paper promises will be redeemed in...paper.
Picture the poor slobs who thought they owned gold when they receive a check for $3000 for their 100 shares of GLD.
I expect the price ain't going up again. GLD inventory is half gone. The Chinese can't buy their 8500 tons they want. Yet gold can still be borrowed cheap and sold short. A wonderful world for bullion bankers.
Hope nobody's got any transactions in progress with bulliondirect.com They've filed chapter 11.
The end of paper gold draws near.
The rampant manipulations of our markets gives new meaning to the phrase "Age of the Machines."
So long as we're discussing the "price of gold", it will not climb. The price of gold assumes the dollar as a unit of measurement. When this fiat system breaks down, and its clearly going to, no one will be talking about the price of gold. They'll be talking about the price of bread and the price of gasoline denominated in grams. All of the COMEX contracts, most of the ETF's - all will be settled in dollars. You can be certain that the guys holding the short positions will hold the paper price down such that they exit at a profit. When no one believes in paper - then what? That's what PM's are for.
If the world goes to a barter system (gold or anything for food) a billion people will die. The current population grew because of the ease of commerce. If we lose that...yikes!!
These people are already buying bread with gold:
https://www.youtube.com/watch?v=Jt15F21jpN8
Things are so manipulated and fucked up I just hope the bounce happens in my lifetime..............
What if all governments collude to keep a cap on the POG because it masks their inflationary ways?
Think like a snake for a moment, as distasteful as it may be. Get the major players in Asia/ ME to come along and they can cap it, force the miners out of business, shares go to zero, no production, put the spot wherever they want it and gold's reign is effectively OVAH as long as their hellish electronic system stays plugged in. Remember PMs are a relative very small market and most of the west has already bought the story. Then we are in I Have No Mouth and I Must Scream territory. 1984 territory.
My best hope is that a 'rogue' nation seizes the opportunity to create the mother-of-all short squeezes. Or much more likely, that Au is not considered important enough to attempt to completely rig it. Or that their Skynet loses juice. I try not to hate the playah but their game, I confess I hate.
If the Hedge funds are short gold, there is your reason for the Four mainstream media articles deriding gold. The hedgies have very strong links to the media and use them.
Article: Did we just reach that short-covering threshold once again?
With the world economy having just started a huge collapse... not necessarily. Definitely could go lower before it recovers.
The question is... how much lower?
And (licking chops)... when is the bottom?
There is always one thing I struggle with about physical (which I love by the way)... what the hell do you do with it if it does go to $4,000 or $5,000 an ounce. I always hear "Real Estate" but TPTB can always tax the hell out of you and they know right where to find you and it is extremely illiquid. Gold is almost like an asset that you can never part with because there is NO good replacement. IMHO.
fsbo
Move to somewhere no property tax is imposed on ranches and farmland. Actually, move there right now! And operate the farm.
Perhaps the best deal of all is to buy an operating farm and let the existing family continue to operate the farm. Share profits with them.
The reason many farms, ranches and other businesses lose money is the same reason other kinds of businesses lose money... they operate with debt and can't compete against others who have no debt.
So make them pay off their debts with the money you pay for the farm (which they were probably about to lose anyway), and operate the business without debt. They win. You win. You win bigger, but that's fine.
PS: There are some fairly inexpensive farms right now with long stretches of oceanfront. So you can let them operate 95% of the acres as farm but live on the oceanfront, and possibly develop the oceanfront. Of course this is not in the USSA, which everyone with a brain should immediately escape.
Actually, there is good evidence that most farms lose money because they pay retail price for inputs, and receive wholesale or worse for outputs.
Farms that use few inputs do better, but selling at as close to retail price as possible is the key.
Well, part of my point was, you buy the farm to live there on the oceanfront, and with little or no property tax. If the farm makes only a small or modest profit, that's all gravy.
But I like your point too. A great many people in central america (where I was mostly talking about) are very good entrepreneurs. Hopefully a gringo who reads ZH and is looking to set themselves up would be more entrepreneurial, take your advice, and look for additional efficiencies and opportunities (like selling lots on the oceanfront to gringos).
Neat stuff,
Live in FarmVille.
Gubmint will never be there.
Nary a criminal wuz found there.
No predators were ever seen there.
Hundreds of miles from nowhere.
A woman's bones, all alone, wuz found there.
Nice fantasy ya got there.
Hahaha. That was general advice. That's not where I live. And the farms I'm talking about are not in the boonies.
They aren't in a city, of course, they are rural. But most of them are fairly close to towns (10km to 50km).
creepy....
Keep stacking physical. All the bs is pure PSYOPS.
http://winteractionables.com/?p=23472