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London Trader - Many Gold Shorts Wiped Out, Lost Everything!
With gold hovering near Jim Sinclair’s resistance point at $1,764, a trader out of London told King World News today, “I fully expect to have $2 moves in silver and $50 moves in gold as absolutely normal at this point. If you don’t expect that, you are not going to understand what is going on, but don’t forget that we are in August and you normally have juniors manning the desks.
This is highly unusual and we do have very thin liquidity in the metals. So that’s one of the reasons you are seeing things move so quickly in both metals. You are talking about a one minute bar in gold being a ten dollar range.”
London Trader continues:
“The physical buyers still have not been filled and they are getting nervous. The buyers in size have not been filled and they are underpinning this gold market. If gold pulls back the buyers will get some fills, if not they are going to have to start chasing this market. In fact, don’t be surprised to see a $100 move in gold if they lose patience.”
When asked about shorts who have been badly mauled he responded, “Well what’s happened with the shorts that were in there is they were absolutely crushed on that overnight rise on Monday. There were some margin calls on some serious players. There were some anguished faces on Monday.
These guys in London woke up with their asses handed to them and I don’t think some of these guys will ever be short again, if they are still in business. So some of these perennial shorts that have always joined in the party got screwed, I mean literally lost everything. For the ones that didn’t lose everything, they certainly lost an awful lot.
Gold just gapped up and didn’t come back and these guys were heavily short. I believe there is still enough momentum to push gold into the $1,800’s. We are moving into season now and things are happening in China that will impact the markets in due course. Because we have been seeing that point of capitulation, we have been witnessing some dramatic moves as the shorts have been mauled, and as I mentioned, in some cases to the point of ending careers.”
This trader previously called the $50 overnight move in gold prior to it happening and also said the shorts would get crushed. Shortly thereafter both events took place.
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
August 10, 2011
