When you ask traders why the price is still going up, you get the same story — lots of buyers, no natural sellers. The traditional sellers in this market — mining companies and in recent years, central bankers — have turned hoarders. And with the advent of ETFs, investors have an easy way to get long.
Full article HERE.Looking for a catalyst to a big move, I asked Lou Grasso, trader at Millennium Futures what could happen in the gold market if the Fed initiates a second round of quantitative easing tomorrow. “If you get QE2, you could see a rally but, don’t think the market will sell off if there is no QE2”.
Next week, Kevin Grady, gold trader at Man Financial tells me traders are watching October gold options expiration on Monday. Out of the money calls are where the action is indicating the bias is still up. Kevin is expecting a run at $1300 in the spot market but says, “first time up, it’s probably going to fail”. Strikes to watch: $1295 and $1300 calls.
My view: In times of economic duress, people hold on to money right? And for those that think gold is just a fad, ask yourselves this: Why are Central Banks hoarding the stuff? Maybe they know something you don't? Something they don't want you to know?