Short Covering Rally for Gold?
In this article Adam Hamilton looks at how speculators are using 30:1 leverage to manipulate gold markets. With 30:1 leverage each Dollar a speculator invests has the same effect a $30 investment in physical gold would have on the market.
The author shows an almost perfect inverse correlation between the gold price and the total speculator short positions as reported by the weekly “Commitment of Traders” report numbers. (The commitment of traders report provides a weekly breakdown of current open investor long and short positions.)
[su_pullquote align=”right”]From prevailing $1200 levels today, a 14.1% gold upleg would blast this metal to $1369! That would really excite traders. – Adam Hamilton[/su_pullquote]He sees the current high number of open short positions as a contrarian indicator and believes that when speculators rush to cover these open short positions by buying long contracts, gold will be pushed higher.
The previous four short covering rallies have resulted in an average 14.1% move higher for gold.
Read the full article here.
“The Dollar is Going to Crash, Buy Gold” – Peter Schiff
[su_pullquote align=”right”]There is no real ceiling on gold because there is no floor on the Dollar – Peter Schiff[/su_pullquote]Peter Schiff believes that the fundamentals for the Dollar are bad and it’s collapse is inevitable. He is bullish on gold for exactly the same reasons he is bearish on the Dollar. He is of the opinion that the Fed will never be able to shrink its balance sheet or be able to control inflation and when this happens investors will turn to gold and silver as a safe haven.
See the full video here.
Gold at Inflation Adjusted Lows
In this post Jeff Clark from Casey Research looks at graph of gold from 1970 – 2015 with pricing based on the CPI U formula that was used in 1980. (The formula used to calculate inflation in 1980) The graph show the current price of gold approaching the 2001 lows. He believes that owning physical gold is as important as ever with international debt levels up by by $57 trillion since 2007.
“Don’t worry about the current rangebound price. Buying now represents tremendous value and tremendous protection against the next economic crisis.” – Jeff Clark
Read the full article here.
Silver Price Forecast : May 2015
In this post Alex Volsky looks at factors that could influence the silver price in 2015. He is bullish on silver and lists the following points to make his case:
Solid demand from both fabrication and investment sectors of the market. 2/3 of an ounce of silver is used to make one solar panel!
The demand for silver has been greater than the global silver supply since 2004.
The average silver to gold ratio from 1995 – 2015 has been 65. Currently the silver to gold ratio is around 72 which indicates to Volsky that the silver is currently 11% oversold relative to gold.
Read the full article here.
