[rohry]

"Because the people who hold the derivatives would cash in as soon as possible under your scenario."

And how, exactly, would that happen?

There are more (short) derivatives on gold than all the gold mines in the world produce in 7 years. Where are the shorts going to buy gold without raising the price to the stratosphere? Your understanding of what is happening seems to be lacking...

[Poohbah]

There are more (short) derivatives on gold than all the gold mines in the world produce in 7 years. Where are the shorts going to buy gold without raising the price to the stratosphere?

Well, there's the point. Lots of short action out there. On the other side of each short derivative is someone who will profit from an INCREASE in price, and they'll make a LOT of money.

Believe me, the holders of long positions will cash in as soon as they can. ESPECIALLY if you're saying that there's far too much short action out there--because the holders of long positions will seek to turn their positions into cash before anyone else does, lest they be left holding an unsecured loan to an entity in bankruptcy court, so they're just going to race to be the first to pull the trigger.