The gold price has become more vulnerable of late as it's being overbought on Comex Exchange and "Too big to fail" banking institutions. However, the future of yellow metal is still safe as more investors and speculators are beginning to buy contracts in order to protect themselves from losing out with “Stop Losses.”
With gold trading, the key for "Too big to fail" bank institution need to have is a complete pause in the speculator’s acquiring the gold - and this is a bit of good and bad news for the metal. In a perfect world, the valid futures contract is going to be encountering maturity date, and the speculators will be forced to either put up or shut up. They'll have to sell their contracts or roll them over into other sources.
It's important to keep in mind that most of these investors and speculators are trading with highly leveraged positions. Their greed fuels their fear on a sixpence. Again, the "Too big to fail" banking institutions will supply them with a employing their long positions employing going short. From the time speculators and investors go long, they are trapped in an opportunist version of Hotel California (self-destructive behavior).
Meanwhile, the "Too big to fail" banking institutions are sitting on top of their losses and trying not to worry about them. They know that given enough time, everything will turn around and they can wait it out for a quiet moment that will facilitate the rebound. By selling a few of their hundreds of millions worth of contracts, and flush out all of those placed stops. This is often a never-ending cycle of activities that take place over and over, a cash-cow machine for the yellow metal bullion banks.
However, over the course of time, something can go awry. Because on many occasions the physical markets can take the price control away from futures trading markets. However, what the heck, these dudes are going to be bailed out by the Fed (Federal Reserve), or the BOE (Bank of England) bodies. In the meantime, their seasoned traders are making bonuses quarter after quarter relentlessly.
Sadly, speculators fall for this every time. Over the course of time, they may begin to see the rise and fall and recognize that the "Too big to fail" traders do get their comeuppance. Currently, the gold has increased over 140 USD in past two months. We're due for yet another rinse out cycle in the Comex Exchange-washing machine. The yellow metal is as overbought as it has ever been in a long time. The gamblers are set to be purged once again. Only a dupe would be likely to wager otherwise. However, on this occasion, it just may be very different.
For it to be significantly different this time around, the value of the US Dollar will have to be weaker. Not much can save bulls from the "Too big to fail" bullion banking institutions. Overall the value of the US Dollar isn't looking good.
With four fronts opening to drive the value of the US Dollar down are: The stagnating United States overall economy, crude oil producer countries getting rid of the US Dollar. The interests of China is securing her future by moving towards leaving the petrodollar and controlling of the Eastern crude oil market with gold-backed yuan, and finally, the commercial interests within the key bullion banks institutions moving towards the China journey.
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