"In last month's Gold Letter, I explored the likelihood of a dramatic short squeeze in the gold futures market. With record short positions facing a rising gold price, I anticipated that short sellers would have to cover their bets by buying back the contracts they sold short, and in so doing, drive the yellow metal higher.
While a full-scale short squeeze has yet to develop, speculators have abandoned their record short positions in gold. In each of the first three weeks of August, futures speculators increased their net-long positions, and by August 20th, money management accounts had grown their net-long positions to the highest since February. The futures market reversed course so much that by the third week of the month, gross short positions were at their lowest since April.
That's quite a turnaround during a season usually ruled by the bears. Just as I forecast, this about-face in the futures market was likely a big factor in gold's resurgence." - an excerpt of Off To The Races
Related stocks and ETFs: Newmont Mining (NEM), Barrick Gold (ABX), AngloGold (AU), Goldcorp (GG), SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX)
Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.