Investing in precious metals 101

driving gold

  • Wed, Jun 28, 2017 - 04:43pm

    #9

    davefairtex

    Status Diamond Member (Offline)

    Joined: Sep 03 2008

    Posts: 3150

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    driving gold

Vadim-

Dave, don't you think it's much easier and more profitable just to be long euro in this case?

From a technical standpoint, I'm guessing its easier to skim money from a smaller market you can control vs the larger market with a lot more players that you cannot.

I mean, this is something I don't know for certain, but from what I've seen, commodities markets have very different market dynamics vs forex, bond, and equity markets.  Anyone seen any big sharp spikes in the forex markets?  In the bond markets?  Equities?  No.  Not unless there is some massive announcement.

If this happened in equities, it would hurt confidence in a "good" market, and that's a no-no.  Gold isn't a "good" market, its a safe haven, and so hurting confidence there is in some sense helpful to the "risk on" cause they are supporting.  I mean, I saw what they did after BRExit.  They absolutely unloaded short.  That's what the numbers said.

Not like 4am on Monday when a "fat fingered" trade blew through support, and along with it all the long stops one day before Draghi starts talking about tapering, and three days before first notice day.

Also, the massive short interest in silver dwarfs anything in any other market that I watch.  I don't think they are doing that for health.  It nets them something, but I'm not sure what the cash-in mechanism is.

I was amused that they walked the Draghi speech back.  He tried a trial balloon, and it got shot full of holes by the markets.  "Stupid traders, they really don't want to own all those sovereign bonds without us as the primary buyer.  Who would have thought?"