Tuesday, October 11, 2016

Gold price drop may have to do with Hedge Funds

Basically we have volatile markets and we have a lot of leverage in the system. Hedge funds borrow money to buy gold, silver, equities, bonds, and currencies. So if you look over the last 2 years, gold dropped almost 30 percent. So we have this volatility. People say well the markets are not volatile, but that’s not true. There’s a lot of volatility. And I think that the positioning in gold was heavily long. And you have to see some of the hedge funds. They know what the positions of other hedge funds are. And so when they know a hedge fund is heavily long gold on the margin, they may squeeze that position out by selling gold. And then the hedge fund which has large positions may have to dump gold and the price goes down. And then they can cover.