Major Banks Buy Gold and Silver

Major Banks Buy Gold and Silver
By Patrick A. Heller, Market Update, orignially posted on Numismaster
May 04, 2009

Three times since late 2005, commodity analyst Adrian Douglas predicted major rises in the price of gold. In November 2005, when gold was about $450, he forecast gold reaching $720 after noticing a large increase in the number of call options in shares of gold mining companies. In August 2007, when gold was $660, he noticed a significant increase in call options for the COMEX December 2007 gold contracts, where gold surpassed $1,000 seven months later.



In July 2008, Douglas noted a huge build-up of COMEX December 2008 call options. Shortly after his prediction of higher gold prices by year end, two large banks (probably JPMorgan Chase and HSBC) sold short gold futures equal to 10 percent of annual worldwide gold production. Douglas's prediction of a major rise in the price of gold by the end of December 2008 did not occur, but he still expects a major blow up of the price.

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