Commitment of traders . . .

“The commercials are the least net short than they have been in more than 11 years,” he observes, “which means they have not been this bullish since gold prices were under $300.”—Steve Briese, July 30, 2013

When professionals, the commercials, are net short gold they are pessimistic.  When their net short positions decline in the futures market, they are bullish on the price rising.  Today they are bullish according to commodity expert Steve Briese.  That is to say: follow the smart money dear readers.  Gold reflects confidence or lack of confidence in the policies of the government.  Quantitative easing has been disastrous for the ordinary American though a boom for the 1 percent that owns stocks and bonds.  For the rest of us that make do with Federal Reserve notes it is like holding stock in Kodak the country—the US of A—and waiting for photography film to make a comeback.  Here is another factor you should consider: gold is nowhere near its high in terms of constant 1980s dollars.  The dollar is about half what it was under Reagan.  Therefore gold prices would have to at least double to reach it highs of the 1980s.  It is currently selling at a large discount relative to the monetary base of  $3.2 trillion.

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