There was a slew of factors pushing gold higher Friday. First, the metal had been under a barrage of technical selling in 2011. The word capitulation, however, was being thrown around Friday after reports circulated that SHK Asset Management sold gold future positions that came with a $850 million price tag. Open interest of 81,000 came out of gold on Monday. The Wall Street Journal first broke the news and said that Daniel Shak, who runs the fund, got spooked by a margin requirement increase and gold's recent selloff and decided to ditch his positions.
The shakeout of the "fast" money led many investors to see this week's selloff as a bottom, which was prompting a flood of money into the metal.
The article re-enforces that gold (and other precious metals - silver platinum palladium) will remain a portfolio stabilizer in the future.
This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents.
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