While the last two days of relative excitement in the precious metals are noteworthy in their bucking-the-trend of recent months, there is perhaps a much more critical 'trend' that may finally allow the demand for physical gold [3] to peer through the veneer of synthetic paper pricing. As JPMorgan notes, speculative positions (defined CFTC net longs minus shorts) have dropped to record lows in the last few weeks. With ETF gold holdings back below 'Lehman' levels and gold coin sales elevated, perhaps the Indian government's [4] (and most of the Western world's Feds) hope for the death of the precious metals market is greatly exaggerated...
Gold Spec positions at record lows...
[5]
"Paper" Gold ETF Holdings at pre-Lehman crisis levels...
[6]
As "physical" Gold coin sales are on the rise again...
[7]
Charts: JPMorgan