Mark, the easiest way to interpret the COTs is to look at the bottom third of the page where it says "GOLD - COMMODITY EXCHANGE INC. REPORTABLE POSITIONS AS OF 04/24/01" and look under "COMMERCIAL" where this week it lists the long and short positions of the commercials (the smart money, we hope) as 69,126 and 41,204 respectively (as of last Tuesday). This means that the commercials' net long position is 69,126 - 41,204 = 27,922 contracts. This is not bad in and of itself, but if you look under "CHANGES FROM 04/17/01" under the commercial long and short positions, you will see the changes from the previous week. This week the commercials reduced their longs by 10,566 and increased their shorts by 4,153 so that they reduced their net long position by 10,566 + 4,153 = 14,719 contracts so that last week the commercials had been net long 14,719 + 27,922 = 42,641 contracts.
The bottom line is that the commercials reduced their net long position by 1/3 this week. They also reduced their net long position by 1/3 last week. It is expected that the commercials will reduce their net long position when the POG rises, but the POG isn't very high yet and the net long position has been reduced by more than half in only 2 weeks. Not good, IMHO, but XAU closed at its high, so is that ignoring bad news or what?
Hope that helps,
vt |
