It has nothing to do with Iraq that I know of.
There are 3 different groups included as "commercial"
1. Miners - they are never long, and sell gold forward if that's what they have to do in order to get lenders to be willing to lend them money, typically to finance new mines.
2. Gold consumers like jewelers - they would usually be long, buying in advance when prices seem cheap, the gold they will need for production.
3. The big shorts are Goldman Sacs and a few other large financial trading outfits. The Fed lends them gold to sell in order to depress prices when its high, then as I see it, after they create a panic and the price falls, they cover and repay the gold they borrowed, keeping the profit I think the rising blue line says those guys are now covering as the price rises instead of borrowing and shorting more. That's a very bullish sign.
One last thing. The large central banks in the past have been large sellers, typically selling up to 500 tons per year. The demand for gold typically exceeds production by this 500 tons, and there is the double whammy that world production is declining at the same time as both jewelery and investment demand is rising. This year, with some central banks BUYING gold instead of selling, even the ones that have normally been sellers are balking at selling. After all, if they sell, they are essentially trading their gold for dollars. Given our ever increasing trade deficit and debt, that wouldn't really be smart, longer term, I wouldn't think.
What I see there is increased demand vs reduced supply, and therefore the price should rise. One other thing. With gold up 14% year on year as it is, it could well be hitting the top of its range. But one thing I really didn't understand was why it didn't drop last week when the middle east tensions relaxed or when the dollar rose on friday. Normally it would have.
That's how I see it.
