Who is shorting Gold?

[friendly_jacek]

Re: Who is shorting Gold?

It's not just gold, but oil that's taking a hit. Moving the price of oil is no trivial thing.

It's not just gold and oil. ALL tradeable commodities and agriculture funds as well as resources equities are down big time and all at once. This is a very unusual pattern of trading.

I found this tidbit dated yesterday:
"Deleveraging continues. All the big brokers know that the surest way to avoid a Bear Stearns problem is to make sure they aren't over exposed to hedge funds. Supposedly there have been several commodities-oriented funds which are selling today. Gold getting crushed. Haven't heard anything about equity-oriented funds but that might be part of what's going on today as well."

This looks like a mini Ka in commodities, but lower commodities are better for equities, so the new equity rally is born.

[Sapiens]

Re: Who is shorting Gold?

Sapiens as you correctly note, "who has the deep pockets at this stage to hammer gold down to $750?". The only parties that have the deep pockets sufficient to take the kind of "expense" this involves are the CB's, who were engaged in the same faltering exercises already when gold passed $700 on the way up. The size of the short positions are not dramatically larger in the past week than they were last August during the last swoon, nor were the short positions dramatically altered at any step of the way up the past $300 in the POG. The whole "they suddenly want" thing is stale bunk.

Quick question - why do you never, ever propose a thesis which does not include some component of conspiracy? Not ever once it seems - I am straining to recall one single "scoop" post of yours that did not refer to hidden collusions. Do all those other theses (the humdrum ones without conspiracy components, like severely overbought market correction) merely seem dull and stale to you?

Also, all the agonizing as to why the gold price is "collapsing" is reminiscent of an AA meeting, where people "confess" their darkest fears and feelings of vulnerability in efforts to expiate the evil omens of misfortune. It's just a freaking correction. An egregiously overdue correction. Plain old exhaustion of a parabolic up-move. Where have we seen these repeat over and over again? In the metals markets. Suddenly the correction is a piece of conspiracy news? This stuff gets really tired.

There are some large shorts and hedges playing the correction for a buck, but they are the same damn shorts that have been playing the parabolic up moves and resulting corrections for years now. "who is shorting gold" is just a resuscitation of the same news that was non-news when the price of gold was soaring. You post some great stuff. Really. But your stature is diminished every time you can't resist going after every last scrap of "conspiracy news" to be found. Even iTulip's editors seem to be toying with the idea it's some startlingly new collusion going on among the short community. Could it be rather that this is plain old "momentum opportunism" in the markets!? Profiteers on the way up. Profiteers on the way down.

Lukester,

Take what I post with a grain of salt. You are also welcome to ignore my posts.

Now, care to explain to me why some hedge funds are naked-short selling Gold to honor their redemptions?

Why would they do that? If the standard answer is: We are bust either way, might as well live another day.

Do you call it a conspiracy if those that are doing it are just serving their own interest without express acknowledgement?

You may call it a conspiracy, I just call it a trend serving self interest. Label me whatever you want, I will just go about my own business, since it is none of my concern what your opinions are.

Adios,

-Sapiens

[blazespinnaker]

Re: Who is shorting Gold?

Fundamentals are necesseties.

Food, clothing, shelter, etc.

China or the US can't sell off all it's oil reserves. They need OIL. They can sell off their gold reserves. They don't need gold.

I understand people who buy gold coins, maybe 5% of their portfolio. It's basicallly end of the world insurance. No problem. But anything more than that, makes zero sense to me.

[touchring]

Re: Who is shorting Gold?

Gold has fundamentals - in jewelry.

What fundamentals? Gold has no fundamentals.

Oil, agriculture, etc .. those have fundamentals.

Gold is just some imaginary idea of value. You might as well be investing in moon rocks or rare stamps. I hear those are pretty hard to come by.

[blazespinnaker]

Re: Who is shorting Gold?

Thanks...........I'm long gold and cash. the more it goes down, the more I stock up. I agree the fundamentals have not changed to tell me gold is stable.
Thanks to all.....

What fundamentals? Gold has no fundamentals.

Oil, agriculture, etc .. those have fundamentals.

Gold is just some imaginary idea of value. You might as well be investing in moon rocks or rare stamps. I hear those are pretty hard to come by.

[blazespinnaker]

Re: Who is shorting Gold?

The oil fall has only just started IMHO.

Could be. If things stabalize in Iraq, I'd guess you might be right.

I have this picture in my mind of this massive straw dipping into an oil lake that iraq/iran share.

[GeraldRiggs]

Re: Who is shorting Gold?

Gerald,

This is what I gather, they are gonna cut rates on the Pound, they are shorting Gold to $750.00.

Who has the pockets to short Gold to $750.00??? Who can take that kind of a loss???

Thanks...........I'm long gold and cash. the more it goes down, the more I stock up. I agree the fundamentals have not changed to tell me gold is stable.
Thanks to all.....

[Tulpen]

Re: Who is shorting Gold?

It's not just gold, but oil that's taking a hit. Moving the price of oil is no trivial thing.

The oil fall has only just started IMHO.

[CanuckinTX]

Re: Who is shorting Gold?

This is just a reaction to the fed being hawkish when the market was betting dovish.

I know what you mean by this statement, but it just cracks me up to see this in print. The fed is hawkish, ha ha ha!

I agree with Lukester though - there's always going to be a lot of noise and violent movements in the metals. Remember in '06 when it eclipsed $700 before going back down to around mid $500's? So if it does go back down to $800 I won't be shocked, but I will be ready to pick up some more.

[blazespinnaker]

Re: Who is shorting Gold?

I have a hard time believing anyone, except Central Banks, can do what's currently being done.

It's not just gold, but oil that's taking a hit. Moving the price of oil is no trivial thing.

This is just a reaction to the fed being hawkish when the market was betting dovish.

As people have said, structural problems regarding the dollar remain. The question now is how the fed will deal with it .. they might take the more painful route.

Unfortunately, the more painful route may cause as much grief as the more loose credit approach. I suspect we'll have to pay the piper regardless, and the central bank really can't do anything about it, except clean up after its own messes.

I sometimes wonder if abolishing the federal reserve is a good idea.

Unfortunateley, the problem with that, is what do you use as a currency to replace it? I really really don't think gold is the answer any more than sand dollars is.

I think the solution is dollar unions like the EU and then use inflation targeting. When you have a wide mixture of economies, it's hard to manipulate the funds rate to tweak things, as different parts will be impacted in negative ways. Generally the best bet is just to leave it alone and be very conservative.

Re: Who is shorting Gold?

friend in London tells me they want Gold at $750.00. I asked why? -Sapiens

Sapiens as you correctly note, "who has the deep pockets at this stage to hammer gold down to $750?". The only parties that have the deep pockets sufficient to take the kind of "expense" this involves are the CB's, who were engaged in the same faltering exercises already when gold passed $700 on the way up. The size of the short positions are not dramatically larger in the past week than they were last August during the last swoon, nor were the short positions dramatically altered at any step of the way up the past $300 in the POG. The whole "they suddenly want" thing is stale bunk.

Quick question - why do you never, ever propose a thesis which does not include some component of conspiracy? Not ever once it seems - I am straining to recall one single "scoop" post of yours that did not refer to hidden collusions. Do all those other theses (the humdrum ones without conspiracy components, like severely overbought market correction) merely seem dull and stale to you?

Also, all the agonizing as to why the gold price is "collapsing" is reminiscent of an AA meeting, where people "confess" their darkest fears and feelings of vulnerability in efforts to expiate the evil omens of misfortune. It's just a freaking correction. An egregiously overdue correction. Plain old exhaustion of a parabolic up-move. Where have we seen these repeat over and over again? In the metals markets. Suddenly the correction is a piece of conspiracy news? This stuff gets really tired.

There are some large shorts and hedges playing the correction for a buck, but they are the same damn shorts that have been playing the parabolic up moves and resulting corrections for years now. "who is shorting gold" is just a resuscitation of the same news that was non-news when the price of gold was soaring. You post some great stuff. Really. But your stature is diminished every time you can't resist going after every last scrap of "conspiracy news" to be found. Even iTulip's editors seem to be toying with the idea it's some startlingly new collusion going on among the short community. Could it be rather that this is plain old "momentum opportunism" in the markets!? Profiteers on the way up. Profiteers on the way down.

[friendly_jacek]

Re: Who is shorting Gold?

I trying to figure out the deal about commodities since yesterday.

I'm hearing some rumors than big traders (smart money) reversed their positions to long financials/technology and short commodities. If one uses a lot of leverage and the move is synchronized, that would explained the sudden effect.

Alternatively, some people talk about margin calls in forcing hedge funds to liquidate positions. I doubt that.

[Chris]

Re: Who is shorting Gold?

I suspect there are some large hedgies that can move the gold price. Sapiens, can you explain the mechanism here?

Also, can you provide a market timing service as well? ;)

[FRED]

Re: Who is shorting Gold?

Gerald,

This is what I gather, they are gonna cut rates on the Pound, they are shorting Gold to $750.00.

Who has the pockets to short Gold to $750.00??? Who can take that kind of a loss???

We've heard a rumor of gold to $800 from several sources. Anyone else heard this?

[Sapiens]

Re: Who is shorting Gold?

@Sapiens:

what does "want gold at $750" mean? They will buy then? They are pushing it down on purpose???? Can you give a little guidance?????

Gerald,

This is what I gather, they are gonna cut rates on the Pound, they are shorting Gold to $750.00.

Who has the pockets to short Gold to $750.00??? Who can take that kind of a loss???