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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 411.49

+0.6%

Jan 8 4:00 PM EST

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To: lrknoff10 who wrote (5453)	3/2/2007 8:55:30 PM
From: dara	Read Replies (1) of 29622

Generally as the price of gold increases the commercials increase their net short position. A relatively high commercial net short position in the past has indicated a toppy market but it is not a good short term indicator as the market can remain toppy for a number of months. When the price of gold decreases, the commercial net short position tends to decrease and a record low or near record low commercial short position can mark a bottom. As the bull market has progressed it has taken a larger and larger net short position to mark a top. Eventually I would think the commercials will be net long gold as they were once (can't remember which year that was although it was before this bull market started as the commercials have been net short since the end of 1999). David Morgan offered a course on analyzing the COT report which I'm afraid I didn't attend. Adam Hamilton has written some good articles on interpreting the COTs. LoneClone has also posted some good summaries on the COTs by Resource Investor. There are others on the PM threads that are more knowledgeable but I've given you my 2 cents worth.

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