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Hedge Fund Gold Positioning Has Never Been This Extreme
Having closed lower for 8 of the last 9 weeks, gold has become the momentum-chasing hedge fund community's latest target. Despite empirical data showing no relationship between higher rates and 'lower' gold, the meme continues as Managed Money added to its already record short position in gold futures this week, pushing the leveraged bets to the most extremely bearish in history.
Our assessment is that one simply cannot afford to ignore the fact that gold provides insurance against a potential blow-up of the global fiat money and debt bubble – regardless of its near to medium term price performance. Its performance is in any case only negative in USD terms – in no other currency can gold be deemed to be in a significant bear market. In fact, as we have recently pointed out, it is already making new all time highs in some fiat currencies.
Gold’s characteristic as a hedge/insurance against the consequences of policymaker machinations has recently gained additional importance in light of the fact that the echo bubble is clearly fraying at the edges already. Sooner or later there will be another full-blown crisis, at which point gold ownership will definitely be of great advantage. It is often said that the only certainties in life are death and taxes, but that is not quite true. There is another apodictic certainty: all booms driven by credit expansion will eventually blow up.
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Record shorts on ETFs, with shortage of physical gold coins. Hmm. Looks like a buying opportunity.
Are the bullion banks on the other side of the trade and if so, who's the dumb money?
Who's the dumb money?
The Fed. That's who.
The Fed, The IMF, JP Morgan...
And what do they all have in common? A vested stake in the status quo; in the hedgemony of the dollar and the fractional reserve banking system. In fiat money and debt in accordence.
Conflict of interest? I think so.
CHECK This ... CFTC Cots Report...
The "COMMERCIALs" are almost even long/short... Very Rare...
They Are almost Always heavily short...
Interesting Times...
http://www.cftc.gov/dea/futures/deacmxsf.htm
I have a small bunch of Gold Junior Explorers stocks (gambling money). They have been moving up for the past few weeks. Up 2.5% on Friday and up 50% since mid-November. A sea-change from the ass-pounding they usually get on down market days. Something has changed.
Let's see--if I were a cenral banker, I'd short the paper to buy the phyz on the cheap, but that's just little ol' me rambling on, and on....
Bingo! Thats exactly the plan for the last couple years.
If JP Morgan is dumb, why are they sitting on the biggest hoard of silver bullion in history?
Probably because they are the custodian of SLV, which is used to distort, twist and manipulate the price of silver.
I've always wondered if the JPM silver is the same bars formerly owned by Uncle Warren...
That was the rumor when SLV was created in 2006. Buffet gave up his 130M ounce stash for under $10 bucks an ounce.
That qualifies him for the ceremonial Gordon Brown dumbass award
At a certain point this "printing fiat to beat down gold" will have to break down...right?
Someone please tell me how this will break down so I don't have to slash my wrists, self immolate and throw myself of a bridge while wrapped in chains!
I think what is frustrating is that we are waiting for a moment. There was a period where it looked like the fiat system would appreciate the printing of currency to determine what the value of silver and gold would be, but due to the fact that all central banks printed it gave rise to the dollar, which trades inversely to gold and silver, and in dollar terms the price of gold and silver dropped.
So now we wait for the dollar to be recognized for the shit paper it is, just like all other fiat currencies have been recognized. But also we should be thankful we are trading in dollars, for if we were trading in yen, euros et al gold and silver would be marketedly higher.
The paper price breakdown will happen when the premium on gold the metal gets to a point where a sufficient number of people come to realize just what the fuck has been happening the last 45 years.
Nobody knows when the moment will come, but it's coming--bet your ass bitchez.
Still stackin'
hairball
Another thing they all have in common is good access to the ones who press CTRL+P
Precisely.
Think for a moment about the obscenity of a hedge-able paper market for the tangible immutable currency of human history.
"with shortage of physical gold coins"
Where is this so called shortage?
Gainesville's shelves are pretty empty. They used to have all kinds of interesting coins, but now is 2016 coins or 'notify me'. EBay had become a'buy me now' and pay double market place.
You can't eat it, but it'll get you laid in a sinful sort of way.
I am happy. We need a blow off bottom. Gold closed the 1040-1050 gap and we need extreme pessimism and we have it. Every investor knows what historically happens next.
http://blog.smartmoneytrackerpremium.com/2015/12/gold-bottom-is-close.html
But they're the smart money! I'm sure CNBC will decide to cover gold now...only to mock it ;)
Fed Rate Hikes Lead to Higher Gold Price:https://youtu.be/GtIGW3_LnSk
I'll add another one to that: The element Au/Gold will always be here on earth. Not so with paper any other things including fiat/money.
And another: Not so with bankers and banks or people for that matter either.
I'll add another one:
Mankind will enjoy REAL FREEDOM, when the last banker is hung from a tree with the entrails of the last politician.
Of course. When you are trying to acquire gold miners for 10 cents on the dollar in bankruptcies, this is what you do. It's called financial terrorism. Only in America could you even conceive of selling something you don't own, let alone have it be legal, and the banks are conveniently stuffed with 2.8 Trillion of funny money, courtesy of a compliant and complicit Federal Reserve.
"Of course. When you are trying to acquire gold miners for 10 cents on the dollar in bankruptcies, this is what you do. It's called financial terrorism."
Economic Warfare as an Instrument of Transnational Organized Crime, with Patrick Byrne
thanks for the link
But the Dollar is worth so much, Why i can almost buy 2/3 of a Snickers Bar...
Dispicable banking gangsters! This is not about Gold, it is about a market easy to rig with the help of the Fed.
Interesting that gold is at an extreme short while the JDST (short Jr gld miners) is one of the most difficult to borrow shares to short at Interactive Broker. . . Shorting the short is really going long the miners so something doesn't add up . . . but, when the market sniffs out Yellen's inevitable reversal and possibly even NIRP, the dollar will take it on the chin and gold will skyrocket. The high short interest will add to the rip . . patience
They are short paper gold. They are not actually short physical. In order to do so they would need to aquire the physical and loan it out. But they don't have the physical. All the physical they are short has been rehypothicated ad infinum. All the physical is said to exist, but never audited, by ETFs like GLD and bullion banks like JP Morgan and central banks like the Federal Reserve bank. Oh, and those holdings are smaller than they've ever been.
So once again, the short is against the price of gold on paper, not the actual physical.
Naked shorts are illegal. They do happen, but not as often as you believe.
There are a million different examples to give you about how futures trading, unallocatted accounts of gold reserves, and rehypothication of assets completely unmask your false statement. Then we would have to believe all central banks have exact accounts on their reserves - this when said banks have not been audited for decades - and also believe member banks like JP Morgan are being honest with their reserve amounts.
Please keep reading Zero Hedge. You will want to become informed.
I have no idea why people would junk your comment above. It is spot on. I guess people have short memories (MF Global for example).
Ignore Anopholes....he is a PM troll.
Selling future production is NOT illegal. It is 'perfectly' legal, unfortunately.
Future production is NOT A NAKED SHORT
So every ounce that has been shorted on the CRIMEX is covered. Is that what you are saying? And where would that gold be?
Keep lowering the price hedgies so I can secure my future buying power.
In a blink of an eye Gold should blast over $2000USD.
You're going to be blinking for a very long time.
If you ever want to understand how intelligent people can be removed of their practical reality skills I suggest you have a look at this lecture from Yale on financial modeling. Watch at your own risk.
https://www.youtube.com/watch?v=VX4eYYmvQ78
This lecture demonstrated the means where theory trumps practical reality in the minds of economists, where knowing the price of everything and the value of nothing originates, and how these theories are latched to the ego. Now think how someone whom has retained their reasoning can turn these students into fascades, giving the illusion of control over ever changing entities like the markets of the world. The key is that these students will actually believe it themselves.
It's interesting to note that the professor here was a hedgefund quant, whom got caught on the wrong side of the housing crisis, giving value to the mortgage backed securities that soon vapourized. This is an example of higher learning? From someone whom overlooked that by dividing the lawful notes that represented the ownership of the real estate into pieces and selling those pieces destroyed the very value of the notes in the first place. An example of how debilitating higher education can really be.
It just seems to me that the uber rich must be secretly buying up every ounce of physical not tied down, even as they force the ETF paper price down so they can buy whatever physical is left on the cheap, knowing in the end, it will be the only ace in the hole.
The problem I have with owning mining shares of stock is that you again just own paper certificates, which may go poof,m whether in the midst of a financial calamity or government confiscation decree.
So, unless you are filthy rich and have all the physical you could ever need, I would concentrate only on owning physical first.
Even though the price discoverty of physical PM's seems totally ass backwards, the ultimnate irony is it's easier to understand and predict what PMs will do given the 5,000 year guideline compared to the debt ravaged, FED distorted, manipulated, obscured, corrupted finacial market we have today.
OF course they are. The last time I looked at gold availability in one of the most pretigious secure facilities in Singapore there were 40 ounces available for sale. Before that, around about mid October I was trying to buy a few grams to top of one of my physical accounts in Zurich and it took them 32 hours to fill the order. There is a massive scam going on right now.
Who are you using? I've got stuff with bs and sb...
I'd be shorting gold too, and going long oil. Gold/oil is way above historical averages.
That, and Goldman is screaming about $20 oil. That should be the cue to buy for anyone who's paid attention. Their clients in Riyadh can't dump the stuff forever.
Oil will go down to $25. There is still storage capacity available for the glut, in a month or so, that will no longer be the case and prices will plummet.
When they decide enough of their obligation to pay is on one side or the other then gold paper price dies what it needs to do to vaporize wealth...I can't wait until shorts are so stacked up that the button gets pressed and all that paper gets annihilated.
Until then, I buy physical on the dips...same for silver...thanks fuckers! All bankers walk the plank...
Go Auric Go!! If previous Short Interest is ANY guide at all...GET READY FOR THE SQUEEZE OF THE CENTURY!
Luvvin it and stackin it
Since hedge funds and the superstar managers at the helm are dropping like flies this is bullish right? Can i get a witness?
I know you folks want gold to reflect what's really going on in the economies of the world and the risk to all of the major currencies but does it not dawn on anyone that the power is currently in the hands of the sellers? Conspirancies of Central banks or any other excuses/opinions - valid though they may be - don't change facts. As Aldous Huxley said " facts don't change just because they are ignored". FACT: GLD went to negative momentum in mid 2011 and into a freefall in 2013. Being short GLD has provided a reward of 36% since it finally fell off the cliff at $160, truly a friendly trend. We can help you find the eventual turn - fact not opinion - press metals tab then radar player to see it as it happens: http://www.quacera.com/#!commodity-report/cdjx
Wow, 36% in 4 years, that is awesome. Sounds like you should put your whole net worth into shorting GLD.
I have a Gold Explorer stock (GSV) that's up 146% from it's 52 week low and up more than 50% since November 1. We'll check and see who does best in 2016.
Pan American Silver is the best of the Silver Miners imo. Great management, good margins and some political changes may open up even more opportunity on existing assets. And while priced at 6 bucks you can get the Jan 2017 10 Calls for 60 cents or the Jan 2018 for 1 buck. If we get back to the old highs (which who knows) you are up about 3500% on your investment. Sure Gold could go back to 600 but with all the craziness right now, things may start to change and we all know QE4 is coming... Im not a gold bug but I do trade sectors in trouble and this one presents an attractive risk/reward. Do your own due dilliegence because when something is priced this cheap there IS a reason... I just think its comms related and not the company itself.
The damn bitcoin still won't die, its at $460.
Are these hedge funds demanding delivery or relying on paper promises?
Bring the CRIMINALS to light...AUDIT the FED.
William Black and Ron Paul, ain't gettin any younger, you know!