The great gold squeeze
A couple of things are playing out right now that we are sitting up and paying real attention to.
1. We’ve written recently and spoke of in Friday’s Ainslie Radio the incredibly tight situation in the COMEX futures trade where contracts exceed an inventory now massively depleted from all the sales this year.
2. The largest refinery in Switzerland confirmed that despite almost doubling the capacity of their plant and working 3 shifts 24 hours each day for all of 2013 and have been unable to keep up to demand. Several times in the year they have been unable to source gold, the first time in its 37 year history. Some of the gold they are seeing are ‘good delivery’ bars marked in the 1960’s – it wreaks of emptying out very old vaults. 70% of the 1kg bars produced are going to, you guessed it…China. They never see Chinese bars for refining, they are clearly all being tightly held.
It appears a massive short squeeze in gold is imminent and one can only guess what will happen to the gold price and indeed the silver price once it is triggered.