Grandich Expects Gold Traders Will Have to Cover Shorts Soon
Source: FP Trading Desk (11/9/07)
“...It’s (gold) also likely to have a fairly good correction and consolidation (eventually), an event that has taken place often since the great Bull Run began around $250,” Peter Grandich wrote in a special alert of the Grandich Letter.
But the bad news: gold is no longer “cheap.”
“It’s also likely to have a fairly good correction and consolidation (eventually), an event that has taken place often since the great Bull Run began around $250,” he wrote in a special alert of the Grandich Letter. “These ‘two steps up and one step back’ moves have kept the majority of people out of gold (along with many closet bears who dress up as gold authorities/media persons but are really anti-gold).”
Mr. Grandich predicts that we are either in or close to having a commercial hedger failure on the Comex. He says these traders, who have been betting against gold since it was at US$600, have been able to cover during downdrafts in the past. And they may have to start to cover soon.
“The commercials haven’t been this short, for this long a period in recent memory,” he said in an interview, noting that this time the market is going against them too. “That is not something we’ve seen in recent memory.” He thinks the next couple of days should provide a lot of information as to how this might impact the gold price...
Before the end of the year, Mr. Grandich thinks gold will hit or come close to an all-time high, oil will break US$100 per barrel, and the Euro will either hit or exceed US$1.50. So don’t be surprised if Central Banks intervene in the currency markets, he said, adding that “the Europeans simply can’t deal with (they may have no choice over time) a US$1.50+ Euro.”