Gold Nears Record High

    Nothing is stopping the bull market in gold and today the yellow metal is within a few points of its all time high of $1266.50 reached back in June. December gold is currently trading at $1259.80. The media claims the upward move in gold is a result of European banking concerns after a WSJ article questioned the validity of the EU stress tests. What is interesting is that the commercials are still heavily short 308,752 contracts which was an increase compared to the previous week of nearly 20,000 contracts. So you have a situation where there is strong upward pressure in the price of gold and yet the commercials are still short. Why would you want to be short something which is making new all time highs? According to a trader friend of mine, gold needs to get to around $1270 in order to bring technical funds back into the market. These types of traders always want to buy breakouts. With the addition of the technical funds, the next stop for gold is $1300. You have to hand it to Bernanke--he is doing a great job of destroying the dollar.

Black Swan Insights

Gold Nears Record High