record highs in which asset? can you specify what you mean?
Commodities in general, precious metals in specific; futures as the primary leveraged instruments to drive speculative valuations. Anything else (bonds, equities, etc) is too fleeting and strained by cross-currents to be accurately gauged right now. The
link has more information than would be fit to repost here.
@miscreanity Thanks for what you have said. Are you suggesting that the COMEX markets are ridiculous and unstable but will be safe for now? We shouldn't see futures defaults for now but it is likely the prices of precious metals will now edge upwards further with more backwardation? and you say January would be a time with the biggest opportunity for an large assault on the price?
There has been slight slides in the gold price in the past during the start of new years.
Sure thing. Sort of - the COMEX markets are managed to the extent that sellers control the short-term volatility and long-term rate of change, but control is slipping. Without the manipulation occurring, the exchanges would be almost guaranteed to default.
Correct - we may
never see the exchanges officially default. Since February is the main delivery month for gold and silver (those being the primary targets for multiple reasons) after the December contract, January will see the same kind of assault on precious metals prices.
Yes, declines of ~8% or so at the beginning of the year have been typical since the 2008 crisis started. Since the bullion banks are trapped and still have February contracts to deliver on, I see no reason for a change in the pattern.
Note: if using options, RGLD and SLW have acted as excellent proxies for the gold and silver price, respectively. I would be much more inclined to make use of them during the rises in precious metal prices. On the declines, GLD and SLV are preferred, as GLD will no longer have capped fees as of 11/11/11 and SLV is suspected of having similar issues - therefore, these instruments are more likely to lag on the PM increases and exceed on declines. At this point, trading PM ETFs in general should be strongly suspect.
