here is a MONTHLY view of the commercial net position in
gold...note that as gold goes up the # of net hedged (short)
positions get larger & as gold goes down the commercials become
less hedged...note they are hedged not short...they have the
product...
say you're a commercial & dig gold out of the ground at a
cost of $500 per ounce and sell it much higher, you're a happy
camper...
I would argue that they are the marginal drivers of price. They
faded the last move up and could actually get much longer here.
That doesn't mean they have to or that a meaningful debt deal
wouldn't take gold down in US$ terms, but it's the one asset that's
appreciating across currencies and the largest bull market of the
past decade. I'm with Richard Russell -- don't sell core gold
holdings; add on pullbacks. Matt's point too for a long time here.
(also doesn't mean you can't hedge in seasonal weakness or scalp
when the conditions are right)
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Gold Commercial COT MONTHLY chart
Posted by 8899 on 1st of Aug 2011 at 01:25 pm
here is a MONTHLY view of the commercial net position in gold...note that as gold goes up the # of net hedged (short) positions get larger & as gold goes down the commercials become less hedged...note they are hedged not short...they have the product...
say you're a commercial & dig gold out of the ground at a cost of $500 per ounce and sell it much higher, you're a happy camper...
Yes, a better indicator for near term price movement is the non-commercials/specs/funds...
Posted by lessarda on 1st of Aug 2011 at 01:33 pm
I would argue that they are the marginal drivers of price. They faded the last move up and could actually get much longer here. That doesn't mean they have to or that a meaningful debt deal wouldn't take gold down in US$ terms, but it's the one asset that's appreciating across currencies and the largest bull market of the past decade. I'm with Richard Russell -- don't sell core gold holdings; add on pullbacks. Matt's point too for a long time here. (also doesn't mean you can't hedge in seasonal weakness or scalp when the conditions are right)