Equity markets have been very upbeat the last 4 months or so. Meanwhile gold has been travelling sideways for nearly 20 months. Sentiment is very low and hedge fund managers are short.
The gold equities have been a very poor investment down close to 40%. Why hold them?
Becasue, nothing has been fixed - global liquidity by the central bankers is the key policy right now. Gold will reflect it soon and in due course the equities will follow. The train has nobody on it!
http://edegrootinsights.blogspot.ca/2013/03/gold-primed-for-unexpected-upside.html
Eric has some very good points in this article. A great analysis, by a very careful and thoughtful watcher of markets.
While Dan Norcini notes,
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/15_Incredibly_Important_Developments_In_Gold_%26_Silver_Markets.html
“Today the hedge funds are short a staggering 68,700 contracts. What makes this
number even more amazing is that it represents an astounding 10+% of the entire
open interest in the gold market of 667,000 contracts. So this is by far the
hedge funds’ largest short position in percentage terms in history.
The bottom line is I don’t recall seeing anything like this since this bull
market began 12 years ago. The hedge funds are now essentially battling against
Middle-East and Far-East central banks and commercial banks. The problem is
these central banks are behemoths compared to the hedge funds.
Something has to give!
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