We have skipped a few days with all the banter re the GDXJ...

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Daytr

4,486 Posts.

22/12/14

08:46

Post #: 14494423
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Originally posted by Daytr ↑

On the 7th day of Christmas the market gave to me, a lower Aussie and currencies generally offsetting an weakness in USD POG.

It appears there is a short trade in gold developing around the potential for Russia to start selling its gold holdings. What I know of Putin, is that he is a stubborn brute & if Western markets are telling him to do one thing, he may very well do the opposite. In fact to date there is only evidence that the Russian Central Bank is buying gold as a diversification reserve asset and if you aren't going to buy dollars then gold has ben one of the best alternatives.

What the market doesn't seem to be prepared for is that they get this wrong and Russia buys more & sparks a short covering rally.

Same could be said for the MASSIVE short positions in these illiquid gold stocks with only a few days of trading left before the holidays.

There are going to be quite impressive quarterlies released imo in January.
Lets see we have higher gold prices in ccy terms, actually make that much higher gold prices & lower energy costs.
Hmmm I don't know about you, but to me that smells like all my Christmases might be coming at once!

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We have skipped a few days with all the banter re the GDXJ rebalance.
We now have three trading days before Christmas.
Many of the large short positions in some of the gold juniors such as BDR should have cleared considerably after the massive volume that was traded.

So on the 10th day of Christmas we will perhaps have some stability as the weight of shorts has been removed substantially.

Trading conditions you would expect would be pretty thin from today onward.

Happy trading all.
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