LONDON – How sentiment has changed. From a shaky start this year the gold price has soared in what is usually a weak time for the yellow metal which tends to pick up in September as the Indian festival season starts to get into full swing. How much of a dampener the prevailing high price levels will put on demand there later in the year remains to be seen.
Now moves are being made to dampen speculation in gold on COMEX, but so far seem to have had relatively little serious impact in percentage terms, which could be an ominous sign for gold short sellers banking on a serious correction after the recent $300 rise in 3 months. A correction is perhaps likely anyway, but the depth of such may be relatively small – again in percentage terms. It remains to be seen how U.S. markets today will see the COMEX increased margin requirement of around 22%, but few expect it to have the drastic effect the raised margin requirements did on silver just over 3 months ago which, coupled with some strange weekend dealings when markets were closed, led to silver falling from close to $50 an ounce back to below $34 – much to the short position holders’ relief!
But for gold, which is a much bigger, and wider, market, such seeming manipulation by those with huge sums to lose if the price remains at current levels, does not look to be even possible.