Close X Cookies are necessary for the proper functioning of By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
Gold & Silver Prices in

Gold signals trouble ahead

IMG Auteur
Published : May 22nd, 2012
330 words - Reading time : 0 - 1 minutes
( 2 votes, 4.5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...





Precious metals are still struggling to gain ground in the face of persistent fears about the eurozone and the threat of a 2008-style market meltdown. The CFTC’s latest Commitments of Traders Reports for the gold and silver futures market in America shows managed money (read: hedge funds, commodity trading advisors, etc) holding their largest short positions in these markets since September 2008. Is The Great Crash coming?

The GotGoldReport comments, however, that if recent history is any guide these large short positions are more often that not an indicator that we are getting close to a bottom, as the chart below suggests:

Gold remains trapped in a range between $1,550 and $1,600, after failing yesterday to settle above $1,600. Silver is holding above $28 just about, but it’s not going to take much in the way of selling to take the price down to just above $26 if we get more depressing economic news. The plunge in the newly issued Facebook shares is an apt metaphor for the broader malaise affecting markets at the moment.

Why, you may ask, are precious metals – and in particular, gold – not doing well in such an environment? Isn’t gold supposed to be a hedge against financial Armageddon?

As John Butler addresses in a new article at the Cobden Centre Blog, as far as financial regulators are concerned, it is not a safe haven asset. Crucially, it is not counted towards banks’ “Tier 1 capital” – those assets such as highly liquid government bonds that regulators deem the “safestinvestments. This means that when the going gets tough, banks are forced to sell gold, silver, and other liquid non-Tier 1 assets in order to raise Tier 1 capital.

Over longer periods of market strife however, this is negated by the fact that trust in financial assets is lost, meaning that precious metals increase in value relative to manypaperassets. But violent corrections are inevitable on the road to peak precious metal valuation.



<< Previous article
Rate : Average note :4.5 (2 votes)
>> Next article
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Trump VS. Clinton-Who’s “Better”...
Uh...I'm not sure I understand the conclusion here.
Trump’s Best Debate Performance ...
20 OctS W.
I have only watched the 3rd debate. I am not American. Clinton is a far more polished debater and was far better prepared than Trump. I agr...
Fifteen Years Into the Afghan Wa...
19 Octsam_site
Follow the money folks. Heroin production jumped 13X when the CIA globalists took over Afghan production. You'll never get the sheeple to see the...
My Most Passionate Warning Yet
17 Octstackerguy551
Thank you Mr. Hoffman. I am concerned by the tone of your article, it is pretty scary to say WWIII is probable, and, so it may be, considering some...
Fifteen Years Into the Afghan Wa...
17 OctRichard B.1
Mykey99, the heroin was the main reason we " liberated" Afganastan. The Taliban were burning down the poppy fields and denying our criminal governm...
When All Else Fails, They Take Y...
14 Octkevthorne
A very perceptive and prescient article, Mr. Hoffman - let's hope things turn out for the best - God help us all.
Do We Really Want A War With Rus...
10 OctRosscoe
Very good article Chris, Unfortunately I too believe we are headed for a major escalation, weak president, confused foreign policy and bur...
Hilary Clinton The Next Presiden...
10 Octrjs22480
Excellent article Andy. Wish there were more people like you that tell the truth and show the way thru this tricky casino the FED has created (and ...
Most commented articlesFavoritesMore...
World PM Newsflow