No, target on USD index, sorry. the trade is not based on any intramarket correlation, although i agree with you at this point. surf
If you haven't shorted GOLD yet, another opportunity is setting up-- the go SHORT line is 893 with stops at 920. Situation developing, word being whispered. 893 is indicated as line in sand for those not short. This is far from a sure thing, but rumors are sourced and acted upon by those with an appettite for risk.... Brutal sell off may be very soon.... stay tuned. best wishes, surf
The deflation trade in the metals is over, it lasted all of two months. With their most recent moves, the fed/treasury have made it clear they intend to inflate their way out of our current situation, regardless of what happens to the dollar. The politicians in this country are no longer willing to withstand the downturns of a normal economic cycle and instead are willing to to leverage the federal balance sheet to avoid one. Japan tried the same thing and ended up with a debt load 190% of GDP. I don't trade gold, but I did buy gold futures equating to 20% of my net worth. The $170 move we just had in gold was much more than a mere bear spike, but rather a fundamental shift as investors rotate into hard assets. IF this thesis is correct, gold could make a new yearly high within a matter of weeks, if not much sooner. A stop placed just below last thursday's close of around $830 should be adequate for someone trying to make a trade.
I've got to ask. The COT report indicates that there are a few commercial traders (i.e. probably banks), that are responsible for the heavy shorting of gold. Do you think they actually have the gold on hand should someone call for delivery? Or are these naked shorts?
"A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity â the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented. " http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm I was reading this thread while reading some good old communist manifesto for class, and I found some possible parallels with to what Marketsurfer might be implying about gold being a short right now. All this talk about gold being the universal currency and all... Is there any back-ups to gold besides metals like silver and platinum? And don't say oil because people aren't gonna carry around barrels to barter for eggs if the time ever comes. Hope this generates some good discussion!
Secondary suggested shorts triggered at 893... suggest holding this bit of adverse vol prior to the expected sell off. surf
Interesting, thanks for posting--yes, good points on the macro politico level-- I believe gold is/will soon be outdated for anything but industrial use and jewelry--with yellow gold actually being out of style for the most part--- surf
Thanks, good observation. truth is some have the physical, some don't. Some ( a ) large metal fund(s) control everything from the mining, delivery, futures, et al--arbing physicals against the futures when you own/control the means of production seems a little fishy..... surf