Thursday, February 21, 2013
Gold Futures and Managed Money
I came across some information earlier this evening that appears to be not only interesting, but may also provide a decent clue that gold is not likely to trade much, if any, lower.
The link above will take you to the full discussion and I wish all credit to be given this author, Mr. Arensberg and his GGR - Got Gold Report, from which I have shared the chart below.
What follows is one of his excellent charts from his publication dated a few days ago - February 18th. It details the weekly net Managed Money COT gold position (blue) as well as the price movement of gold futures since 2008 (maroon).
I encourage you to read his report if you are interested in either the current positioning of the various powers within the Commitment of Traders report (COT) or if you are specifically interested in the widely touted notion that hedge funds are abandoning their gold investment positions.
My interest in this chart, to be honest, is to assess how smart these hedge funds are. I have drawn 5 light blue arrows to locations in the past 7 years when the positioning of Managed Money was heavily short. At present you may notice that they are more short of gold than anytime since 2008.
Anyway, I am very impressed with their trading. They have managed to consistently telephone the exact bottoms of gold's enormous up legs.
OK. One more check mark in the box for the patient bulls. :-)
You know, when those smart floor traders start to see these hedge funds running to cover these shorts it could get really exciting. I mean, these boys all play for blood and nothing appeals more to them than taking care of a wounded animal with a proper feast for themselves.
Tisk, tisk for the hedgies and their brilliant leaders.