[SteamshipTime]

Is there a website or article that explains derivatives, how they work, and why they are used? Is the thrust of the article that JP Morgan et al. have piled up more sell obligations in gold than there is physical gold available at the current price of around $310/oz?

(I'm afraid this one's too much for my feeble little liberal arts brain.)

[imawit]

Well, it looks like they had a tough time knocking it back down today. I was instinctively looking for another $309-$310 range to buy more. I don't see that so much as a possibility but I'll wait until tomorrow to see how much muscle they have or don't have left.

[imawit]

Ya know, I liken this to shorting a stock. If the stock goes up and never turns south again, sooner or later you're going to have to take your lumps and cover.

Given this, there isn't enough gold to buy to cover your short in gold. And, on top of that there are some derivitive deals that have been made that further lien the short position in gold making the requirement to cover a short position even larger.

Some one tell me if I'm wrong.

My question is, how could these braniacs in finance ever figure that gold was going down below $310 if that's there pain point or down below $250 which I would guess is where they started their shorting and deriviting. What sign from heaven did they misread to come up with this scenario of gold lower than $250.

[LS]

Unbelievable how people will deny the fact that gold has, for thirty years (!) been a LOSER. Someone must be desperate to crank the price of gold up. It won't happen dude. We are in deflation. REPEAT AFTER ME, DEFLATION.

Oil prices low (about $.70 cents, after taxes, or pre-1969 levels).

Interest rates at all time post-Depression lows.

All OTHER precious metal prices down.

Productivity rising, but not prices. In any econ textbook, outside this goofy website, that is DEFLATION.

[snopercod]

Maybe I'm just jaded because I bought those Maple Leaves for $520/oz. in the 80's; Still waiting to break even.

[Servant of the Nine]

I for one am convinced.

I shall replace my Tin Foil Hat with a Gold Foil Hat at once

So9

[Hugin]

This article seems to make the assumption that the supply of gold is fixed. Like oil, the supply is directly related to the price. As the price goes up, the less rich ore deposits become commercially viable, and supply goes up. Also a lot of gold mines will release product they've been holing back. That brings down prices down again.

Oh well, if gold goes way up I can always buy a gold dredge and go hit the motherlode.

[EaglesUpForever]

The market's been rigged since there was a market. Funny how it is always those with Gold to sell that speak of the "gold cartel."

[BlackJack]

bump

[ExSES]

Worth rereading since these folks pretty well nailed the future (at least the past several months). We will see if their scenario continues to play out as a genuine bull market for gold!!