We take it you've hear of the phrase "We are what we eat" - our financial and regulation authorities must be all eating nuts these days. The guy with 10 million dollars "under management" can control 10% of the U.S. Gold Futures - welcome to post-crisis risk management!
But this is nothing; the excuse for the correction in Gold will seize to be valid in time. Speaking of time, now is the time to make your shopping list of your favorite juniors. Gold has easily found buyers during recent retracement after incredible run, and now is poised for another uphill battle with the wall of worry.
On a daily chart, we are at the same level on MACD as we were at the last correction in the beginning of August, just before Gold and junior miner's 2010 home run.
Below on weekly chart we have a strong bullish candle, while the STO is close to potential reversal - the way how the Gold market held this recent correction provide us with comfort that this Bull is far from over - the juniors miners in particular will ignite the next leg up.
Geopolitical situation in the Middle East ignited by the uprising Egypt and Oil closing above 100 will spike Inflation fears all around the world - negative real rates during this stagflation phase will provide necessary fundamental support to the Gold bull market, while Silver will bring even more excitement and cherry picked juniors will bring the nostalgic memories of the fun days just before the crisis.
LONDON | Fri Jan 28, 2011 5:44am EST
Jan 28 (Reuters) - Hedge fund SHK Asset Management liquidated a U.S. gold futures position this week valued at over $850 million, more than 10 percent of the main U.S. futures market, the Wall Street Journal reported on Friday.
As a result of the move, which was made on Monday, the number of gold contracts on CME Group Inc.'s Comex division plunged by more than 81,000, to about 500,000, in their biggest single fall ever, the WSJ reported. It said an average daily move is about 3,000 to 5,000 contracts.
Daniel Shak, who runs the $10 million fund, told the newspaper that the trade had been profitable for him for years, but it stopped working and the exchange kept raising his margin requirements, forcing him to put up more money.
Shak said that when the exchange raised it by 25 percent on Monday, he decided to cut his losses and end the trade, the newspaper said.
(Reporting by Jan Harvey; Editing by Jason Neely)"