ah, a merging of the minds. singularity?
edit: oh gaud, what the hell am i thinking?
actually i should clarify. i will NOT be going long pm's or the miners. neutral right now.
I agree: if positions aren't already established below $1,680 for gold and $32 for silver, it'll be better to wait for the rally to run itself out from this point. Picking up some positions here won't be bad, just more harrowing to endure.
There's some ambiguity on that in regard to options - many can still be had on the cheap, but that will change over the next few trading sessions. XAU calls (ideally, Jan-Mar '12) are still tempting, even at relatively high strikes.
reminder to self: should you ever consider getting into trading, read this thread first. ^^
If it helps, great!
the shorts on pm's and miners served its purposes well...
investing is a process or evolution. when the info changes you have to adapt.
They did; it is; well said. I still think you'll regret dumping most of your physical, though. The gold numbers are probably going to be completely cooked to mask the lack of physical backing the complicit ETFs and exchanges. When the popular scramble to acquire occurs, there won't be anything real to claim - only promisory certificates.
Thankfully, there are a few gold miners that either are or have plans to pay dividends in-kind. The two most prominent so far are: Evolving Gold Corp
. (TSX:EVG) and Gold Resource Corporation
(AMEX:GORO). Gold mined, gold paid. It's the closest most individuals can get to the Chinese style of accumulation by parterning with mining operations or buying them outright.
Critically low levels of warehouse stocks are present with the major western exchanges and the open interest has been rising
rapidly in both gold
. The knockdowns in price have forced and/or scared out all the weak holders, yet there are still far more steadfast positions than there is available metal. If those strong holdings can't be enticed to sell for paper profits, there'll be a default. Therefore, the metals are most likely heading toward a doubling in gold (from the mid-$1,500 range) and as much as a tripling in silver (from ~$30).
This all has to happen before
- the December COMEX options expiration. If hundreds of futures options holders decided to exercise for delivery, the exchanges could be looking at 100-1000x more precious metal demand than there is available supply; much
worse than the situation with standard futures contracts alone. So both the spike high and
subsequent decline need to be forced during the next couple of weeks for enough traders to either take profit or be shaken out. The past week's rise of ~$150 in gold wasn't exactly the jaw-dropping event I suggested: it's looking like there was some short-covering as a prelude to the real moves.
sell for anything less than double your money in a raging bull market marked by severe shortages of the demanded product?