With many global investors still concerned about the price of gold and silver, today King World News interviewed the “London Trader” to get his take on these markets. The source stated, “We’ve still got a very, very compressed spring because the shorts are still trying to defend their positions, their naked short positions in both the gold and silver markets. As an example, in the silver market, you saw that type of activity in the silver ETF (SLV). Shorts borrowed another 3 million ounces to cover immediate delivery concerns. There are 25 million ounces now borrowed from SLV. It is getting worse and worse for them.”
“They are naked short on the COMEX and to meet immediate delivery demand they are having to borrow it from the SLV. It is still unwinding and it’s still got a long way to go. Yes, you will still see games being played and yes you can create paper gold out of thin air. But there comes a point where each time you do that the physical buyers are taking it and it has a lagging effect that will catch up, and eventually it gets reflected in the price.
The demand for euro gold here in London is so intense it’s shocking to some of the players. This is what has left some market participants in the US wondering why the price of gold has risen along with the dollar. It’s because demand in the eurozone is unimaginably strong. The euro physical gold demand is off the charts and it is creating shortages for metal, in size, here in London.
The physical gold market is actually being drained by euro gold buyers. People are converting their euros to gold and there is only a finite amount of physical gold available. Again, that’s why you are seeing the dollar and gold rallying together.
We are also seeing very strong markets in Asia with solid premiums. Silver is in backwardation. There are huge premiums for size (large tonnage orders) in silver and you are going to wait 3, 4 or 5 weeks for delivery. There is constant backwardation into the March futures contract. For the most part, the bid on silver spot has been higher than the ask on March futures.
These paper markets are a joke. Nobody who is seriously in the business of taking physical delivery is trading on the COMEX anymore. That is big news. The COMEX is no longer a credible marketplace....
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Wow, Cam, interesting all right. I was going to say the English and spelling was a bit off, but the writer is probably fluent in at least two languages. Is the message to buy gold and gold shares, and wait until June 2012 to see what happens? This could be huge, and certainly with physical gold as the backup, gains a lot of respect in these markets.
How fast will companies with gold in the ground act to get theirs out, and to buy out smaller players? For them, a lot hinges on the gold price.
A bit like large companies, no bad news or contrarian opinions allowed, only Yes Men permitted.
The reason people love gold is based on emotion according to experts in behavioural finance. Like old religions, what must have worked 2000 years ago just might work today.
The DJIA is 9% ahead of gold in the last 3 months, looks like a turnround is on the way.
I've just been watching a dude called Gerald Celente on RT, who apparently has 80% of his assets in gold.
His are of expertise is predictions, a 'psychic', or after watching this programme a 'psycho', complete with heaps of conspiracy theories.
One of his predictions is that martial law will happen in the USA in 2012, however I wouldn't place too much emphasis on it because he said in May 2010 that before 2011 there would be a worldwide severe economic crash. LOL
Originally Posted by Skol
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