Tuesday, July 02, 2013

Latest GGR Video on YouTube – COMEX Commercials Nearly Net Long Gold

YouTube TVHOUSTON --  As a courtesy to our entire GGR readership, our latest Got Gold Report video update on the June 28 Commodity Futures Trading Commission (CFTC) commitments of traders (COT) report for gold futures is now posted in the public domain.  Got Gold Report subscribers received access to the new video report Sunday, June 30.      

Just below is a link to the new video report, which focuses on the positioning of the largest, best funded and presumably the best informed traders of gold futures – the traders classed by the CFTC as “commercial.”  

Commercial traders include producers, processors, refiners, bullion merchants, jewelry manufacturers, physical bullion management firms, mercenary swap dealers, etc., and the bullion-trading banks many of them end up trading through on the COMEX bourse.  Commercials are the people involved in the gold trade who predominantly use futures to hedge their price risk. 

As of this June 28 report (data as of Tuesday, June 25), the commercial hedgers had their least net short (least number of net hedges) for gold as a percentage of the total COMEX open interest (9%) since December, 2001, which coincidentally was the last time commercial traders as a group were net long gold futures.  Gold changed hands for $270 the ounce back then, by the way.  So one might conclude that with gold in the $1270s last Tuesday, the combined commercial traders of gold futures’ expectations that the gold price would fall further than it already has is equivalent to when gold was trading in the $270s (not a misprint), three months after the 9-11 terrorist attacks in New York, Washington D.C. and Pennsylvania.

That is to say that the commercials are not positioning for further gold weakness if their net futures positioning is any guide.  Much more in the video embedded below for convenience.  A direct link to view it on YouTube is at the end of this posting.  

Errata:  Please note that in the introductory text in the video there is a typo, which reads:  "COMEX Commercial Traders of Gold futures Hold Their Least Net Short Position in Eight Years."  That should have been "Eleven Years" (since 2002).  The remainder of the content is accurate and reflects our understanding of the facts. Apologies for the blunder.  


Source:  CFTC for COT data, Cash Market for gold price data, GGR

Direct link to view on YouTube:    https://www.youtube.com/watch?v=ojdgVrVdRPs&feature=c4-overview&list=UUcZMrg0Ji17hh_KxktrBgHg   


The Original
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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.

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