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Originally Posted by Panda  Quote:
Originally Posted by lannarebirth Quote:
Originally Posted by Panda ^ Speculation then? | In a manner of speaking yes, but when you move into a closed end market, with an incredible amount of money, it's not speculation that you can move it higher. It WILL go higher. The hard part is getting out with all your money. It's like a pyramid scheme in a way. Same as it ever was. | I am a bit naive here, but it sounds more like market manipulation than just pure speculation. |
That's right. Commodities are closed end markets with limited "inventory" in any given year, or in some cases, ever. Consequently regulations limit the position size any one entity can hold or they can move, even corner the market. That's what's been going on and recent legislation has been passed to curb thepractice. the regulatory hammer hasn't fallen yet, but the market is selling off in anticipation that it will. commodities markets are not a place for "investors" It is a place where producers and buyers hedge their prices for receiving shipment of commodities. The "funds" have no intention of ever receiving shipment, they just want to drive the price higher, which they did.
Noneof that means it won't go back to this level (or higher) in the future if true market dynamics warrant such a move. That is not extant at present, thus the selloff.