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Gold/Mining/Energy : Gold & Gold Stock Analysis
GLD 393.24+1.1%Dec 11 4:00 PM EST
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From: paul ross3/6/2013 10:36:27 PM
2 Recommendations   of 29622
 
"The most recent Commitment of Traders (COT) reports regarding gold have been extremely interesting and have an explosive component already loaded and locked into place. You have the smartest of the bunch, the commercials, positioned for gold being at the bottom of this lengthy correction. They are hedgers by nature and quite literally always net short of gold.....but it is the degree to which they are short that tells their story. At present their net short position is minimal and very similar to their correct positioning at the 2008 bottom. The commercials have apparently seen no reason to increasingly hedge their long positions with gold in the $1575 area. Which is also to say that they are not terribly concerned that gold is going much if any lower.
Meanwhile we have the Managed Money group who has had a considerable long gold position for some time but recently has been adding thousands and thousands of shorts to their position. They have not been selling their long contracts - rather they have been hedging their long contracts with these shorts, presumably on the fear that if the bottom falls out at $1523 their long positions will be protected. Perhaps we could think of their excessive short positioning as 'enthusiastic insurance' purchases."



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