>>>Yesterday, the open interest jumped 9100 contracts to 181,502 contracts, which is almost 40,000 off the recent lows. The specs are heavily short and the commercials heavily long. That should be confirmed in tomorrow's CFTC report. The gold market has bent, but not broken, again. We suspect the market is set up for a big rally.<<<<<
Bill, this is the same setup that occurred in late 97 when gold failed to hold its support at the 380 level. At that time,the comm. were massively long, and the specs big time short. There was a large buildup of open interest just before gold broke through 380 to the downside, and the POG fell $40 over the next 6 months.
I hope you are right and that we will see 400 gold over the next year,which, I feel,will mean the Central Banks efforts to reflate will be successful. However, I sense that we are in the grips of worldwide deflation, and that very shortly gold will break its support level around 278 to the downside. |
