Excerpts from Stewart Thomson’s article at:

http://www.321gold.com/editorials/thomson_s/thomson_s_062111.htmlticle at 321

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9. While anything is possible, I believe the gold market is setting up for a massive rally, and it could begin within 48 hrs.

10. Jim Sinclair is arguably the “king” of the gold community. He believes the hedge funds that are massively short gold juniors may soon find that they are forced to liquidate their huge bets at enormous losses, as a large and hostile takeover wave is initiated by senior gold companies on the juniors.

11. I’ll add that any such action could produce a price surge in not just the juniors, but in the senior gold stocks, too. As institutional money managers see seniors adding reserves and production numbers, they will likely move in to buy these stocks aggressively.

12. Just because there have been many false starts and wrong calls about the long awaited gold parabola does not mean it can’t happen. The timers predict it. The rich wait for it. Know the difference in the two actions, and embrace the winning one.

13. The hedge funds have done the gold community a huge favour with their massive (and perhaps illegal in many cases) short play on the gold stocks. The problem for the funds is that they have to attract a large group of gold stock sellers to exit their position profitably at low prices.

14. While the gold community is struggling with low share prices, the stocks are not low enough to exit, in the minds of the hedge fund operators. That mindset could lead to heavy loss booking by the funds if the senior (and intermediate) gold producers begin a buying binge on the gold juniors. The funds need sellers, not giant buyers, so they can exit! What could be coming down the gold stock tracks is best described as a gold seniors super-train.

15. Let me repeat what I said yesterday, which is that I absolutely do not believe the view that gold junior stocks are down because institutional money managers bought bullion ETFs instead of junior gold stocks. No professional money manager buys the world’s lowest risk investment, bullion, as a replacement for a planned purchase of one of the world’s highest risk investments, gold juniors. That’s nonsense.

16. Juniors are in the tank because of hedge fund shorting programs that are financed by the banks. The banks are on the other side of the trade and the coming takeover action by senior producers will likely in time, make the banks' profits “beyond obscene”. It won’t happen in 24 hours. In the gold market, patience, not the highest gold price prediction, is what will make you richer.