Who blinks first in the gold tug of war – physical buyers or short speculators?

One could be forgiven for thinking that there are 2 seperate gold markets that are entirely disjointed from each other with twin headlines that demand for physical gold is setting new records and the premiums being paid for physical over spot is also at a historic high and yet speculators have lined up the biggest gross short position in the metal since the start of the bull run in 1999/2000 as the chart below shows.

Who will prove correct? Take a look at page 61 in the latest edition of our magazine for a well reasoned piece that elaborates extensively on this observation. Link – http://issuu.com/spreadbetmagazine/docs/spreadbet_magazine_v16_generic