Courage! Buy this Gold dip! Bull market corrections are the most violent of all!

Tuesday, February 19, 2013

Got Gold Report Courtesy Release of our Entire February 18 Report

HOUSTON – Yesterday we released a new Got Gold Report to Subscribers covering recent changes in the positioning of the largest traders of futures on the COMEX in New York. In that report we detail that a majority of the recent selling pressure for gold futures has been coming from what many would say is an unusual source, if the record-high short positions taken by those traders is any guide (which it almost certainly is).
http://treo.typepad.com/.a/6a0120a60...7597970c-320wi

Perhaps more important than the record size of the gross short positions now held by normally net long Funds (Managed Money traders) is what has consistently occurred in recent (gold bull market) history when the the trend following Funds have built up overly large pure short positions.

Unless a quantum shift is underway, which seems implausible, those very high short positions should become the “highest of high octane rally fuel” once "The Funds" believe the downward impulse for gold is exhausted.

What is also a bit of a “tell” in our view is that the very high short positions put on by Managed Money traders has been gold-specific. As we conclude in the special Got Gold Report article: “… we have come to the conclusion that the Funds are in the process of pulling off one of the great head fakes of our trading career. … Either that or they have correctly positioned for the gold market to collapse while forgetting to do the same for silver.”


Since sending the report out we have received multiple requests from colleagues we respect and admire to share our work in the public domain - an honor we cannot in good conscience deny. So, below is a link to the entire article, including all the important charts and data, in PDF format.

Hopefully readers will find it worthy of their time.
Read the entire report: "Gold COT Imbalanced, Becoming Bullish"

Download 20130218 GGR COT Notes (Please allow a few moments to load.)
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Below is just one example of the many important charts (and data) in the full GGR . It is the record high short gold position held by the usually net long traders the CFTC classes as "Managed Money," aka "The Funds," on February 12, 2013 - just before gold fell sharply, tripping sell stops and trailing stops to test near $1,600.

http://treo.typepad.com/.a/6a0120a60...7b64970c-500wi

Clearly the recent selling pressure for gold futures can be directly attributed to The Funds. The natural hedgers and bullion banks have actually been DECREASING their collective net short positioning recently, as the data in the report shows.

Gene Arensberg for Got Gold Report

This article gives a good sense of how fund managers push price. Massive shorts are in here to drive price down, allowing for the lowest possible prices for when they flip positions. Keep in mind they don't have infinite resources with which to short. At some point their funds are exhausted and they have to flip, which is the takeaway from this article. We're now 6 bucks from entering the target $1520-$1565 range.

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Originally Posted by mamboni

... Either that or they have correctly positioned for the gold market to collapse while forgetting to do the same for silver...

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Interesting, but a possibility is these fund managers believe the economy is about to boom, so silver will be needed for industrial purposes (including Obama's solar cells), but gold will not be needed so will go soft.

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Originally Posted by JohnQPublic

Interesting, but a possibility is these fund managers believe the economy is about to boom, so silver will be needed for industrial purposes (including Obama's solar cells), but gold will not be needed so will go soft.

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Looks like a Dollar down day for silver so either it is a tail wagging the dog or someone is also shorting silver.

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Originally Posted by slvrbugjim

Looks like a Dollar down day for silver so either it is a tail wagging the dog or someone is also shorting silver.

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Of course gold is now down over $100.

Ive basically decided to FVk all the charts and data at this point....whats opinion at this point? Im going to continue to trade paper for lead, silver and gold until I have no more paper....

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Originally Posted by JDRock

Ive basically decided to FVk all the charts and data at this point....whats opinion at this point? Im going to continue to trade paper for lead, silver and gold until I have no more paper....

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Exactly! I don't believe any of the economic data coming out of Washington and New York. It is all suspect. Physical gold and silver in hand can never default.

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Originally Posted by JDRock

Ive basically decided to FVk all the charts and data at this point....whats opinion at this point? Im going to continue to trade paper for lead, silver and gold until I have no more paper....

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I understand this in principle. But I hope you don't literally mean no more paper. In the doomsday scenario, there may be a period of days or weeks (or maybe months) where ONLY paper will be accepted as a medium of exchange for material goods.

They should've republished this today...!

Maybe tomorrow?