Loading ...The greater question for precious metals enthusiasts revolves around the possibility of the metals being sucked downward into a liquidity squeeze as in 2008 to which I respond ”not a chance”. In 2008, gold mining stocks and silver and gold bullion were over-owned and overbought after a five-year vertical ascent. The hedge funds had levered up on gold and silver with massive net long positions that had to be reversed once the subprime bubble was pricked. Here in 2018, as seen in the recent COT report, the Large Speculators in silver are actually net short which is an historical anomaly and the first ever of its occurrence. Gold at 163,000 net longs held by the same is a relative modest number when matched off against the 185,000 Commercial short position. In 2008 at or near the peak, those number were north of 300,000. I therefore am going to assume that an equity market drawdown will not impact gold to any great degree and interestingly, I think it might actually cause a spike in silver as the offsetting trade that will reduce exposure for the Large Specs will be net purchases of silver (to remove their shorts). (Forgive the pun.)
No Comments
No comments yet.
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.