Tag Archives: speculative gold position

Gold and Soybeans: Speculative Bubbles Ready to Burst

A common question here would be, “What do gold and soybeans have to do with each other?” The short answer is that they are both the most speculatively overbought commodities we trade. The deeper answer is that both of these products come from the ground and the producers of these commodities have used this rally to lock in bonus money as there is no way they collectively subscribe to the inflation thesis suggesting structurally higher commodity prices in a near zero percent interest rate environment. Our experience has shown that the huge imbalance in positions between the commercial producers selling forward production and the speculators’ buying of anticipation typically resolves itself in the fundamental direction of the commercial traders’ collective prediction. The gold and soybeans rallies are about to find themselves lout of gas.

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