http://www.marketoracle.co.uk/Article21647.html"As I pointed out...

http://www.marketoracle.co.uk/Article21647.html

"As I pointed out several days ago, gold is observing the same phenomena but from the other side of the mirror. It sees the never ending deficits coming out of the US, no initiate on the part of the US and Europe to actually write off bad debt, and the inundation of fiat currency that is on the near horizon. Thats why gold started to inch its way higher just when everyone was convinced that it was on its way down to 1,000, or even as low as 850.00 depending on whom you asked. Instead last week gold held the first line of support at 1,158.20 and is just now sticking its head back up above 1,200.00.

I look at gold, silver and the HUI and I see all three following an upward trajectory over the coming weeks and even months. The September silver futures contract is up another eight cents at 18.50 and that is right on decent resistance. Silver continues to look cheap to me and I have noticed that with both gold and silver the spot price trades above the futures price on numerous occasions.

This tells me that there might very well be a shortage of physical and that is precisely the rumors floating around the COMEX right now. I have no doubt that large interests sell paper gold and silver to defend their positions/suppress the market, especially the silver market, and sooner or later youll have a lot more paper obligations than physical to meet that obligation. Since the Commodities and Exchange Commission does nothing to enforce abuses, or control naked short selling, I would not be surprised if we are now at the tipping point. If thats the case metals prices will explode once the cat is out of the bag. Finally, my only real concern is with gold/silver stocks and that concern is twofold:

1.If a mining company produces gold and silver, and a government is pressed for cash, they will nationalize the mine. You as the owner can buy insurance for country risk but whos to say the insurance company will be around long enough to pay you off,

2.If the stock market seizes up, you can own the shares in the best gold mine in the world and you wont be able to trade them."