http://www.mining.com/gold-price-hedge-funds-have-never-been-this-bearish/ I was struggling to make s guess at why this would be with Greece Puerto Rico and China (particularly China), the best completely unsupported theory I could come up with was that everyone is betting that the USD would benefit so much that USD denominated gold would go down. Surely the fact that gold is essentially sideways despite DXY gains and these massive shorts is pretty positive? Can't help but think that one short sharp shock to markets, which could come from any of the approximately half dozen things going on at the moment, could kick off enough safe haven buying to break the backs of the shorts causing 5 or 6 million ounces of covering in addition to whatever is bought by the safety seekers. The Chinese situation in particular seems like a possibly, particularly for regional investors outside of China that could see losses in the money they've invested in China and local economic problems since China is a major financial partner in a lot of those economies. Does anyone have any informed commentary on why there's been such big short selling?
$20 down in gold over 2 hours is a big but not huge move, without any obvious reason it's odd, with all the recent economic happenings it's definitely weird. 90 cents in silver in 2 hours is a route. That's the % evuiv. of $65 down in gold in 2 hours, if gold went up that much in 2 hours you'd expect a war to Gabe broken out somewhere important. No good news out of Europe, Greeks refuse to offer anything new today. China down despite best governments best efforts. Puerto Rico likely to default. IMF announces US markets at risk from over leverage. Iran talks fail to meet deadline. Dow and other US markets down. Gold down, silver WAY down without any move in the DXY (i.e not down because of dollar strength). Oil getting the crap kicked out of it too but that has a geopolitical basis. I haven't heard anything describing why.
Looking at the charts it looks like USD strength against all currencies...flight to safety? :lol: http://www.silverstackers.com/charts/index.php?page=2
The aussie is down as is a few of the other commodity currencies but the DXY USD index was actually higher 2 odd hours ago when this all started, its actually weaker now than when the drop started. Only up 1% on the day vs about 6% down in silver.
I used to subscribe to a market letter called "The Privateer" by Bill Buckler. He had a term called "Gold the negative barometer". I have often checked the gold price after stress in the markets for financial assets and sure enough gold went down rather than up. Even allowing for the "flight to quality" to USD you would think there would be a bid for gold.
