That is a possibility. I am just "speaking" from historical event as we can only use history as a guide. 1st week April 2013 was what I was referring, not 2011/2012. That weekly strong support was targeted and caused the initial waterfall effect of stop running. I did not look at the short positioning at the time as I was not into gold until recently. If I recall from what I read back then, the short paper tonnes that someone or some company shorted was MUCH more than what Shanghai entity sold into the market yesterday. If I recall it was something like a total yearly supply of physical was shorted on the Friday and Monday.
Here is a weekly chart of that fateful april 2012 stop running in gold.
View attachment 80709
Currently there might me a big short position netted but the fundamentals are all conspiring for the gold drop. Strong USD, potential Fed rate hike despite what people thinks, no Grexit, Ukrainian war fading into another non event, low inflationary globally ie Crude sold down. I am sure if I put in a bit more thought I can come up with more reasons.
I do not in the past put much significance to gold/oil ratio but I did flip a chart and it has been peaking again recently.
From the gold bull side, its the eternal US economic implosion, manipulation and China buying BIG on physical. As we can only work on reported data, Friday's report by China was not what the bulls were speculating on the physical accumulation of tonnes. Lets not get into the paranoia of deliberate Chinese under reporting etc, because it will then make a mockery of ANY data reported by ANY authority and we are restricted to gut feel inform views.
As I said, I rather be constructive with myself and my views than to rely first of all that gold is money or fiat ccy will implode or any other far fetched ideas for the sake of a balanced view and no paranoia. A clear mind set can see things for what it is.
I have always maintained that we are the small people with our investment in the hand of the big players and the best approach I can do under this type of scenario is to try to follow where the Big or smart money is doing through the charts. I don't want to bet against these entities coz it may work once in a while but trading/investing is not about being lucky if it is to be treated as a career so consistency is what I am striving for or else I would be gloating at my so call success at the Uranium sector. In practice I was just an ill informed investor that picked and joined a spec sector that supercharged and allowed me to get out at the second attempt so I was just lucky. The same thing happened in IO although it was less profitable and yet again I was lucky that China came along and I was in the right sector at the right time. I want to move on with these lucky cycles because in time it will wipe me out if I start taking things for granted!
Good luck with the long.
