Wednesday, July 21, 2010

It Has Been Rumoured...

Tim Iacono, in a commentary on yesterday 6.08 tonne drop in the SPDR Gold Share Trust's holdings, passes along this rumour: "Rumor has it that liquidations at John Paulson’s hedge fund (owner of about 10 percent of the ETF) are somehow involved."

It can be safely assumed that the expected value of rumours are less than what they cost, but they do show something about the rumour-mongers. "Paulson's being hit by redemptions" piggybacks on Dennis Gartman's partial liquidation two days ago, and plays into a current bearish bias about gold. A contrarian-minded bull would be inclined to believe it because it smacks of capitulation.

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