Precious metals expert Michael Ballanger compares the Dec. 1, 2015 Gold COT Report with the latest one; the contrasts could not be greater.
I have a question: “Does ANYONE have the foggiest recollection of just how incredibly bullish the Gold COT (Commitment of Traders) Report structure was back on Dec. 1, 2015?”
The Large Speculators were net long a paltry 9,750 gold futures contracts; today they are net long 285,911 contracts.
The Commercials were net short 2,911 contracts; today they are net short 315,477 contracts.
The always-wrong Small Speculators were net short 6,839 contracts; today they are net long 1,577 contracts.
Market timers for gold were 104% bearish (meaning that they were short); today they are 94% bullish (long to the teeth).
Gold miners were trading at valuations never before recorded; seven months later they are up 250%.
On December 1, 2015, gold was trading around $1,050/oz; today it is at $1,323/oz.
Now I have a second question: “Does anyone realize how things have changed?”
The COT Report shown below, while historically bearish, is not going to cause a crash in gold and silver prices; it is instead going to prevent a runaway in prices until the criminally inclined bullion banks have unwound what was two weeks ago a painfully acute paper loss in the billions. I only mention these two COT reports to illustrate the contrasts between then and now.
Despite the modest weekly improvement in the COT structure, gold and silver miners are trading down from the post-Brexit peak and have now given up the uptrend line that dates back until the January lows. Now, if the HUI (NYSE Arca Gold BUGS Index) can get back above the line sooner rather than later, it is a “no harm, no foul” scenario and 300–325 could be in the cards. My bet, however, is that the miners continue under …read more