Tuesday, February 19, 2013

Got Gold Report Courtesy Release of our Entire February 18 Report

HOUSTON – Yesterday we released a new Got Gold Report to Subscribers covering recent changes in the positioning of the largest traders of futures on the COMEX in New York.  In that report we detail that a majority of the recent selling pressure for gold futures has been coming from what many would say is an unusual source, if the record-high short positions taken by those traders is any guide (which it almost certainly is).

20130219 - trading pit farPerhaps more important than the record size of the gross short positions now held by normally net long Funds (Managed Money traders) is what has consistently occurred in recent (gold bull market) history when the the trend following Funds have built up overly large pure short positions.

 
Unless a quantum shift is underway, which seems implausible, those very high short positions should become the “highest of high octane rally fuel” once "The Funds" believe the downward impulse for gold is exhausted. 


What is also a bit of a “tell” in our view is that the very high short positions put on by Managed Money traders has been gold-specific.  As we conclude in the special Got Gold Report article:  “… we have come to the conclusion that the Funds are in the process of pulling off one of the great head fakes of our trading career.  … Either that or they have correctly positioned for the gold market to collapse while forgetting to do the same for silver.”     

Since sending the report out we have received multiple requests from colleagues we respect and admire to share our work in the public domain - an honor we cannot in good conscience deny.  So, below is a link to the entire article, including all the important charts and data, in PDF format. 

Hopefully readers will find it worthy of their time. 

Read the entire report:    "Gold COT Imbalanced, Becoming Bullish"    

Download 20130218 GGR COT Notes  (Please allow a few moments to load.)

***

Below is just one example of the many important charts (and data) in the full GGR .  It is the record high short gold position held by the usually net long traders the CFTC classes as "Managed Money," aka "The Funds," on February 12, 2013 - just before gold fell sharply, tripping sell stops and trailing stops to test near $1,600. 

20130219 Record Short Pos MM gold

Clearly the recent selling pressure for gold futures can be directly attributed to The Funds.  The natural hedgers and bullion banks have actually been DECREASING their collective net short positioning recently, as the data in the report shows.  

 
Gene Arensberg for Got Gold Report  

 

(Au $1,605, Ag $29.43, H-374.96, G-16.65, C-1,171.80)


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The Original
Vulture Speculator

Trading gold, silver and mining shares since 1980 with a focus on taking advantage of volatility extremes, Gene Arensberg analyses the markets through a basket of technical and fundamental indicators and shares his findings from time to time here at Got Gold Report. Mr. Arensberg has been quoted in the Wall Street Journal, Dow Jones MarketWatch, USA Today and dozens of other news organizations.

"I've been a huge fan of Gene and his amazing work for years..."

Brien Lundin, CEO, Jefferson Financial, Host of the annual New Orleans Investment Conference and Publisher of Gold Newsletter


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