A Slow Motion Short Squeeze in Gold

by David Kranzler
Investment Research Dynamics

The inexorable rise in the price of gold, despite the concerted effort among the BIS, western Central Banks, CME and LBMA using paper derivatives to keep a lid on the price gold reflects the likelihood that a short-squeeze in physical gold bullion is percolating. Former copper futures trader and Chairman of GATA, Bill Murphy, calls this a “commercial signal failure,” which occurs when the demand for the fulfillment of the physical commodity underlying a paper derivative overwhelms the ability of the entities short the contracts to fulfill the terms of the contract.

Chris Marcus and I discuss the likelihood of this development on the Comex:

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