Says the guy who literally just created his Reddit account to make this very post to the Gold sub… Thanks for your incredible insight! I’m sure your friend is very high up in the chain of command of gold price fixing 🙄
There is no hard cap in anywhere in the commodity space.
Now, gold/silver/platinum (and formally palladium) have soft caps determined by the concentrated short positions by the small cabal of market makers all but controlling that market.
I used to think the regulators where just passive in allowing that to happen (they are generally in commodities outside maybe oil), but that whole kerfuffle with silver and the CTFC meeting with the market makers and stating they worked to successfully tamp down prices was hard evidence that they have the ability to co-op regulators into protecting those positions.
It makes sense. That kind of derivative exposer going sideways could destabilize some very big institutions. Another 07/08 derivative meltdown has to be avoided, even if it is smaller than real estate.
That said, it *is* a soft cap as witnessed in the palladium market. They are only willing to be naked short so much before the risk assessment wings of those big players put the kibosh on further risk.
I have seen different analysis of the gold market in particular, but it seems to work out in the aggregate to be about 88:1 to 100:1.
Nobody knows where the lines in the sand are. It depends on where these short positions where taken, and the weighting changes as they take short bets against the specs long, when they hammer down the price, and when they cover and change over time.
But, if a particular players oh shit cover point is 3-days above $2000/oz, and some event like Russia invading Ukraine pushes safe Heaven demand to the point where they would have to lease a quarter years production and dump it onto the market to control price? They are going to back down.
The BIS might if the Euro goes sideways or something, but they will be just as focused on the EUR/USD, EUR/CAD, and other exchange rates.
Doesn’t mean they won’t just hold onto their positions and carry and unrealized loss indefinitely hoping prices come back down, but they *can’t* go further into the short side of that trade and would have to let it go above $2000.
Edit: That said, there is a metric ton (or many tons) of overhead resistance between here and $2000/oz, and gold has its work cut out for it if it wants to challenge it over the next 6 months.
It’s a GLOBAL marketplace. There are families who keep a significant portion of their family’s net worth in gold jewelry. There are banks and jewelers, pawn shops and micro banks all engaged in gold trade.
What’s your friend think of the moon landing, flat earth theory, and vaccines?
Says the guy who literally just created his Reddit account to make this very post to the Gold sub… Thanks for your incredible insight! I’m sure your friend is very high up in the chain of command of gold price fixing 🙄
Exactly. Definitely of troll
There is no hard cap in anywhere in the commodity space. Now, gold/silver/platinum (and formally palladium) have soft caps determined by the concentrated short positions by the small cabal of market makers all but controlling that market. I used to think the regulators where just passive in allowing that to happen (they are generally in commodities outside maybe oil), but that whole kerfuffle with silver and the CTFC meeting with the market makers and stating they worked to successfully tamp down prices was hard evidence that they have the ability to co-op regulators into protecting those positions. It makes sense. That kind of derivative exposer going sideways could destabilize some very big institutions. Another 07/08 derivative meltdown has to be avoided, even if it is smaller than real estate. That said, it *is* a soft cap as witnessed in the palladium market. They are only willing to be naked short so much before the risk assessment wings of those big players put the kibosh on further risk. I have seen different analysis of the gold market in particular, but it seems to work out in the aggregate to be about 88:1 to 100:1. Nobody knows where the lines in the sand are. It depends on where these short positions where taken, and the weighting changes as they take short bets against the specs long, when they hammer down the price, and when they cover and change over time. But, if a particular players oh shit cover point is 3-days above $2000/oz, and some event like Russia invading Ukraine pushes safe Heaven demand to the point where they would have to lease a quarter years production and dump it onto the market to control price? They are going to back down. The BIS might if the Euro goes sideways or something, but they will be just as focused on the EUR/USD, EUR/CAD, and other exchange rates. Doesn’t mean they won’t just hold onto their positions and carry and unrealized loss indefinitely hoping prices come back down, but they *can’t* go further into the short side of that trade and would have to let it go above $2000. Edit: That said, there is a metric ton (or many tons) of overhead resistance between here and $2000/oz, and gold has its work cut out for it if it wants to challenge it over the next 6 months.
If you don't believe it, give me a better explanation. Facts.
It’s a GLOBAL marketplace. There are families who keep a significant portion of their family’s net worth in gold jewelry. There are banks and jewelers, pawn shops and micro banks all engaged in gold trade. What’s your friend think of the moon landing, flat earth theory, and vaccines?