We all knew you'd write a beauty on the day of the CFTC meeting...

We all knew you'd write a beauty on the day of the CFTC meeting into position limits. You didn't disappoint us.

"While there is no doubt in this writer's mind that some of the markets have become distorted, such distortion has almost exclusively been to the upside, and has been caused by speculative hedge fund players looking to make a buck or nine. Recall the Everestian pile of gold futures contracts that neared 800 tonnes late last fall and helped push the metal to $1226 amid poor real-world fundamentals.

Price suppression? What price suppression? Quite the opposite, as, in price inflation to a point where a commodity was driven far beyond its equilibrium and fundamentals-based fair value. You may rest assured that gold would not only not have risen from is multi-year $252 lows to $1226 by December of last year, but it would not have made it past even the $500 marker for instance, if in fact there were any dark forces at play.

Regulation and more transparency are all fine, but be careful what you wish for. This (if it ever succeeds) will result in the departure of shorts and longs from the market and alter the game in ways yet unfathomable.

Sadly, many adherents to the sci-fi genre that constantly sees market manipulation, price suppression, and other such evil schemes out there, do so because they are wedded to the idea that gold can, and should only go up, and that this is all about some hidden battle between the little people and Imperial Storm troopers. What they have never understood is that when a market-maker takes a short position in the market, it does so not in some evil/naked/sinister fashion, but normally as a hedge against a physical position it just acquired in the process of market-making.

The fact also remains that the decades-long bear market in precious metals whittled the number of ready/able/willing market-makers to but a slim number of firms. Concentrated shorts? You bet. Due to the changed nature of the market landscape. Intent to keep and/or to drive prices down so that the masses bleed? Better come up with solid proof. Fast."

From Nadler's "Now Hear(ing) This!" at http://www.kitco.com/ind/nadler/mar252010.html