Dear member,
So far so good for all those gold analysts predicting gold to crash due to the extreme commercial short positions. Boy, where they wrong or what? Ever since $940 gold they called for a gold ambush but here we are, gold blasted through its old all time high of $1035 put in place in March 2008. Again, record high short positions are no guarantee for a gold ambush as many want you to believe. Rember what we said in our latets chart update of Sept 16:
Excerpt TGDR Chart Update Sept 16:
Could a commercial signal failure be in the making here? Are we on the verge of a spectacular historical move in gold? We will know the answer within days. Some wild swings are in the pipe-line since record high commercial shorts vs record high spec longs can't be solved without violent spikes up or down. In 2005 we had a commercial signal failure which send the commercials running for the hills thereby launching gold from $430 to $730 in short order. We could be very well on a similar juncture here right now.
Investors betting on the commercial shorts since they come out as winners most of the time please note that the massive short position they have accumulated has been accumulated when the Central Banks have become net buyers, when Barrick Gold rushes to cover its 6 B$ short position, when China has said it has lost confidence in the dollar and will buy dips in the gold price, when the Middle East and India crank up into high demand gear, when the Chinese government has encouraged its citizens to buy gold and silver, when South African mine supply has again declined by 7.8% y-o-y., when investors such as Greenlight Capital are switching from GLD to real bullion etc etc. Now even a chimpanzee could recognize the vulnerability of the massive short position here so betting on them (commercial shorts) could very well be proven wrong coming weeks.. Again, it did happen before. In 2005 the commerial shorts were forced to cover thereby launching the gold price from $430 to $730 in short order
END.
Well, here we are, commercials are running for tthe hills while gold finds itself in record high demand. Gold enjoys record high demand since confidence in the once almighty dollar is evaporating like snow in hell. Yesterday's news that some Middle East countries launched secret moves with China, Russia and France to stop using the US currency for oil trading won't be a big help for the dollar either:
The Demise of the Dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk
Tuesday, 6 October 2009
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
END.
Where do we go from here?
It seems that we have had our last chance to buy our gold below $1000 indeed. We just finished a 18 months consolidation period which could be follwoed by another sharp upswing to $1350 ore more within the next 6 months. It has been the rhythm of this gold bull market so far, sharp 6 months upswing, 18 months consolidation, sharp 6 months upswing, 18 months consolidation, now another sharp 6 months upswing? My bet is yes. The weekly chart support this idea very much. The reversed head and shoulder pattern has a price objection of $1300+ on it, see updated daily and weekly weekly charts above:
TGDR Gold Chart - Daily
TGDR Gold Chart - Weekly
Best regards,
Eric Hommelberg
GoldDrivers.com Inc