Major Gold Melt Up Coming

Before It's News
A highly trustworthy bond trader friend in New York just sent this to me, regarding the recent up move in the gold markets and how he expects this trend to continue. (By the way, the term "Melt Up" was coined by my good friend Thom Calandra.):

the CFTC is about to regulate the position sizes of the major commercials in various commodities, gold included. Apparently, there are a bunch of bullion banks, JP Morgan, and DB who are short a boat load of contracts, and if there (sic) positions need to be cut back, then that could create a squeeze...

For those of us who don't speak Wall Street, the CFTC is the Commodity Futures Trading Commission, which is charged by the government with the regulation of the commodity futures markets. If Deutsche Bank (DB) and JP Morgan are short gold, that means they will have to go on the open market to acquire gold to pay off their end of futures contracts. The squeeze is created when people who owe on contracts have to go out to the open market to buy the gold they need to make good on their contractual obligations. This drives the price of gold much higher.

a story today how Russia came out and said they bt gold last month helped run the tables...

This is from a Reuters story reported at Mineweb and other outlets. Central banks are now accumulating gold and whatever overhang effect the IMF's threats to unload more of their gold stock pile had in the past are effectively gone, as we reported here at Before It's News. There just isn't enough gold for every one in the world to put all their money into it -- at $1170. There's plenty of gold to go around -- at a much higher price, say $8,000 per ounce or $16,000 per ounce.

hedge funds like einhorns greenlight capital says they have moved from the etf to physical gold...

I had heard this. They got out of the GLD ETF, installed their own vault in New Jersey and are accumulating a pile of gold there.

and john paulson is out there marketing a gold fund... real money is getting behind this trade... open interest still is rising... and the charts are starting to look near vertical

Things are starting to accelerate in the gold market. Once the hedge funds jump into gold as a momentum play, it will start to move even higher in a self fulfilling prophecy.