seems there is a massive short squeeze going on in gold. Since weeks we can read even from convinced gold bugs that the commercial short position is too large and market is due for a pull back. In fact as gold reached 500 sentiment was becoming very bad for gold and it was somehow clear it was due to rise much more. Maybe commercials underestimated the power of the hedge funds putting a lot of money into gold and are now badly squeezed out of their positions. Nice job !
I would imagine you are right, when the shorts are cleared out, watch the rally fizzle and all the gold bugs get burned
Or maybe the gold bugs will not get burned, because (1) Their cost price is much lower than 480 "US Dollars" and/or (2) They have plenty of spare margin for the transaction
For every 1 investor/trader that expects higher prices there are 20 that keep calling for a top. It's been like this since the start of the bull mkt in 2001. I image there are a lot of frustrated gold bulls out there that are not on this rally. Trying to be too clever and trade in/out. People should realise their own limitations and understand that there are very few investors who can successfully trade positions......
you nailed it. I am long gold futures since 360 Dollar, and today I covered some at 525 Dollar and already deeply regret it. The good thing is that I also have some bullions where I can't get in and out that fast... The trick in bull markets is to shake off the traders with extended moves or gaps without ever looking back.