Where Were You 31 Years Ago?

By Michael Ballanger – Re-Blogged From Gold Eagle

Q: How do you get your broker out of a tree?
A: Cut the rope.
—Common joke from October 1987

It was 31 years ago, on Oct. 19, that I watched a $300,000 stock portfolio begin to vaporize, with a Monday loss of 35% morphing into a 93% amputation by the end of the week, the remaining cash balance totaling slightly over $16,000.

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Spectacular Gold COT Report

By John Rubino – Re-Blogged From Dollar Collapse

No need to mince words anymore. If the futures market still influences gold’s price, then that price is going to spike. And silver is better than gold.

Since January, gold futures speculators have been trending from extremely bullish to scared short. And in the week ending last Tuesday (the most recent data available) they appeared to capitulate, adding a massive number of short positions while marginally cutting their longs. They’re now about as close to neutral as they’ve ever been. Based on the history of the past decade this is hugely bullish, since speculators tend to be wrong when they’re fully convinced they’re right.

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Silver Trading ‘Oversold’ On Record High Short Position

By Bullion Vault – Re-Blogged From http://www.Silver-Phoenix500.com

SILVER TRADING among hedge funds and other speculators last week stepped back from the most bearish position on record, but the metal remains “oversold” and “vulnerable” to a swift jump in price according to several analysts.

Betting on metal prices by trading silver futures and options contracts at the Comex and ICE exchanges, speculators in early April held a net negative position equal to a record 6,159 tonnes.

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Record Gold/Silver Shorting

By Adam Hamilton – Re-Bloged From http://www.ZealLLC.com

The miserable summer for precious metals grinds on, with both gold and silver limping along near major lows.  Such dismal price action has exacerbated the extreme bearishness long plaguing this sector, sparking even more capitulation.  But this incredible weakness will be short-lived, as it was driven by American futures speculators’ record short selling.  That will soon reverse into guaranteed, proportional buying.

In all markets including precious metals, price is rightfully considered the most-important fundamental signal.  Prevailing price levels are set by free-market buying and selling until supply and demand meet.  And gold and silver prices are exceptionally weak, with these despised precious metals slumping down to challenge major new 5.2-year and 5.4-year lows this week.  So their fundamentals must be bearish, right?

The only fundamental factors that can drive prices near major secular lows are too much supply, too little demand, or some combination of the two.  And if the gold and silver markets are as oversupplied as their prices indicate, they’re likely to keep drifting lower indefinitely.  This popular bearish thesis is universally believed today, with virtually no dissent.  There aren’t many contrarians left to combat this overpowering groupthink.

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