We've often discussed the reason why we like and why we think the price of Gold will go higher so there's no reason to revisit the main points tonight. That said, something big happened Friday after the NYMEX closed that is sure to light a further fire under the price.

The NYMEX significantly raised their margin requirements on Gold contracts. When something like that happens, it hurts the people on the wrong side of the trade. As the price of Gold has moved further and further north over the past couple of years it's obvious that the losing side is on the short's shoulders. This losing proposition has only been further compound by the meteoric rise of late.

Now in normal times, like I said above, the wrong side of the trade is squeezed by being forced to put up more margin but if you take the time to read the following article, I think you will appreciate the magnitude of this. The article describes the enormity of this short position. The second link is to the Reuters article on gold. The over-all markets may be in for a rough ride this week as we await word from the FED but more and more gold is looking like the safest place to be.

http://news.silverseek.com/TedButler...

http://www.reuters.com/article/marke...

Regards,

Buck