re: correction occurring (2) No large group of people could emotionally go to the market and buy gold after the rise it has had especially in the last few weeks, but when gold does rise like is has done its blamed on fundamentals which are driving people to buy gold regardless.
Baloney.
I don’t have access to the data to prove it, but sometimes you get cases of this in the stock market, like what happened in October this year, but the opposite direction.
People see the speculative opportunity, but because no one actually wants to hoard gold then go buy call options, naturally the gold for these options has to be brought on the market to cover the option (this is probably the mysterious never ending fundamental demand). What you probably saw last night was profit taking on the call options, which meant that the gold that was brought to cover the calls was sold. What you should see now is the call options continuing to be liquidated, but as it falls put options written simply because people know when gold gets this high it generally tanks for the next several years. Naturally to cover these put positions gold must be shorted on the market and thus have double the effect and speed of the downside compared to the upside.
People can emotionally go and buy call options knowing they have a set time frame for things to happen. It is stupid to think “fundamental” demand would cause such a spike and still have so many people willing to buy, it simply does not happen.
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