Home > Best assets to buy > Why are commodities (oil, gold and silver) going down?

Why are commodities (oil, gold and silver) going down?

It could be due to the ending of QE2 and the return of (relatively) sane monetary policy, allowing markets to find their own level and for US house prices to continue to drop and for banks and governments to go bust.

But how realistic is that?  We have Helicopter Ben at the helm, after all.

Well then, what’s the other explanation?  Well…………

It is pretty clear what is going on here. The cartel is losing its metal (and its mettle) and is attempting to flush out those contract holders who are most likely to take delivery – the marginal investors who buy futures contracts then remove the metal from the exchanges. Also obvious is the hope is that the increased margin reqs will drive them out. It will not bother the JPMorgans or the HSBCs in the least. If nothing else, these actions reek of desperation and are indicative of the fact that the physical, buy-and-hold crowd is substantial, is here to stay, and is in fact winning the war. Keep it up folks, congratulations on a job well done.

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