Like the old saying goes, you can’t keep a good thing down, and from the looks of it – the “long gold” boys are starting to win the tug of war with the “short gold” gang. From everything we’ve been reading of late their appears to be an iceberg sized short position of gold/silver contracts out there in the market and as the swimming pool start to drain we could soon see just how exposed the market is to these naked “shorts”.
We expect that once the water line gets to a certain point this could get interesting quickly (just like when the winning side of a tug of war team gets the upper hand) and the short covering could create a bull market in gold (and silver) the likes have never been seen in modern times. From Peter Schiff’s stern warning video to Don Harrold yesterday, exposing the shaky position of the FDIC and US commercial/retail banks, this is starting to look like a real old fashioned shootout. The important aspect being where investors are positioned when the bullets start flying.
We have been advocates for natural resource stocks for some time now and we urge everyone to take a good look at our precious metal clients: Silver Dragon Resources (OTCBB: SDRG), Victoria Gold Corp, (TSX-V:VIT), ECU Silver Mining Inc. (TSX: ECU) & Great Panther Resources (TSX: GPR) as potentially ideal instruments to protect ones portfolio against inflationary forces and capitalize on what could soon become an even stronger market for precious metals. Each of these mining groups have discovered potentially world class gold and/or silver deposits and represent what we believe to be some of the most well positioned and compelling junior mining names in the business – that should all do well in a static market for gold and silver and could be extraordinary stocks to own should precious metals take off on an extended bull rally, which many of the market prognisticators are calling out for.
Now on to today’s article . . .
NEW YORK (MarketWatch) — Gold futures rose above $1,000 an ounce Wednesday, as the dollar declined after the release of upbeat economic data in the U.S., burnishing the appeal of the precious metal.
The U.S. economy shrank in the second quarter at a smaller pace than earlier forecasts, the Commerce Department reported Wednesday. Meanwhile, private-sector employers in September shed the fewest jobs since July 2008.
Gold for December delivery, the most actively traded contract, gained $7, or 0.7%, to $1,001.40 an ounce on the Comex division of the New York Mercantile Exchange. The contract earlier hit an intraday high at $1,006.40.
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