Gold – this year

Posted: August 12, 2013 in Uncategorized

As we all know Gold has collapsed this year. The reason has been mainly political.

The issue with Gold started with the botched bail-out of Cyprus. The levy and  freezing on the normal citizen bank account was risking provoking a “run” on paper currencies.

The solution has been making collapse the other currency, gold. Some institution sold a naked short (so a short position without physical backing) with close to USD 24.9 billion worth of gold sending the price plummeting. At the same time that institution booked for itself several million dollar of losses.

There are not many player that could do such thing and still be around and not been legally challenged. Namely the Fed or someone like them.

This sent the gold price in deep backwardation (eg Gold for delivery October is more expensive of Gold delivery December) which means that, in the physical (non ETF) world, there is someone scared that there is not enough real gold or one of the main supplier of Gold has serious delivery problems.

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