from King World News
Today Alasdair Macleod warned a major crisis for $37 billion Comex gold shorts may be triggered by a historic panic in the banking sector.
A Potential Crisis In Comex Gold
July 7 (King World News) – Alasdair Macleod: We are all used to the bullion banks covering their shorts on Comex by waiting until the speculators are over-bullish and vulnerable to mark-downs that trigger their stops. Algorithmic traders go from long to short in a heartbeat as well, and they dump contracts into a falling market, speeding up the decline. We should say at this juncture that the Managed Money speculators are short-term, attracted by futures leverage, and their gold position is often part of a wider risk strategy deployed by hedge funds. They do not intend to stand for delivery. The wider investment world taking strategic portfolio decisions does not often get involved with gold, so the Comex gold contract has been a secular play.