In his 2nd quarter letter to investors, asking “What is happening to gold?,” the Tocqueville Gold Fund’s John Hathaway points out that “commercial CFTC positions have swung sharply away from the short side,” — they’re now “nearly net long” according to the latest COT report — and “Comex warehouse stocks have dwindled precipitously, dropping 32% or nearly 100 metric tonnes since the beginning of 2013.” Also since the beginning of 2013, “physical gold held by ETF’s such as GLD has dropped by 586 tonnes.”
“Where does the liquidated gold go?,” asks Hathaway. “The final destination is impossible to know, but the first stop is into the accounts of “authorized participants”, aka, bullion dealers such as JPMorgan and Goldman Sachs. There are quite a few dots to connect here, but in our opinion, (and it is admittedly our speculation) an historic short squeeze is looming, and the insiders (bullion dealers) see it coming. By using the paper market to crush the price of gold, they have attempted to shake loose physical gold to reduce their short exposure in order to minimize the damage from what lies ahead.” … Read More >>>
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