Norcini – A Violent Wave Of Short Covering In Gold & Silver
kingworldnews.com
Today acclaimed trader Dan Norcini told King World News that in both the gold and silver markets, “… we were seeing a violent wave of short covering.” This started taking place immediately after the Fed signaled the additional QE.
Just six days ago Norcini correctly predicted that gold and silver would continue this surge. The acclaimed commodity trader had this to say about what is now taking place: “Once the QE announcement came from the Fed, gold and silver immediately soared, but so did the rest of the commodity complex. Anything that was a hard asset was moving higher, along with the stocks that produce those hard assets.”
“The stock market hit four and a half year highs, gold is knocking on the door of $1,800, and silver is pushing up toward $35.50. There was a flood of hot money that had been on the sidelines which came roaring back into the market. While hard assets were flying high, the US dollar continued to break down.
Of course anybody that was positioned on the short side of the metals was simply run over when the news hit the wire. Those shorts were panicking out of their positions and more buying poured in the throughout the day….
“The shorts could not exit positions without paying up. So we were seeing a violent wave of short covering along with fresh buying from new sources. There was a relentless flow of new money coming into both the gold and silver markets.
Eric, all of this is having the net impact of further destroying the middle class. Crude oil is nearing $100 a barrel, so consumers are going to get hit with higher gasoline prices. When you take a look at the CCI (Continuous Commodity Index), you can see the move higher across the entire commodity complex.
Grains were on the move, along with livestock, cocoa, coffee, all of these markets were moving higher because hot money was coming in, and speculators were chasing prices higher. There is enough of this money, which has been on the sidelines, that we could continue to see upward pressure going forward.
But people have to remember that wages are still relatively flat in both Europe and the US. The jobs environment in the West is dreadful. This means that the already stressed consumers in the West are going to be hit with another round of inflation at a time when they can least afford it.
So we will continue to see the middle class being wiped out on both sides of the Atlantic. Having said that, from an investment perspective, this is the type of stagflationary environment where gold and silver can continue to soar, just as they did in the 70s.”
Read More: kingworldnews.com
2012-09-15 06:42:49
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