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Speculative Gold Longs Capitulate

Published 09/07/2014, 12:28 AM
Updated 07/09/2023, 06:31 AM

After reaching a relatively frothy net speculative long position of over 165,000 contracts as of the August 12th Commitments of Traders report (COT), Gold speculators have capitulated over the past three weeks by cutting their net long exposure by over 60,000 contracts – here are the last 3 COT reports presented in chronological order:

8/19/2014

Gold COT, August 19, 2014

8/26/2014

Gold COT, August 26, 2014

9/2/2014

Gold COT, September 2, 2014

The most interesting aspect of the recent COT data is the sizeable increase in the large speculator short position (over 30,000 contracts in the last three weeks). This is an indication that the hot money (hedge funds and CTAs) is betting on a further decline in the gold price in the near future. Should the downside momentum stall over the coming weeks, these recent “momentum shorts” will become a natural bid in the market as they lose patience and cover their short positions.

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DO NOT follow Tommy Humphreys advice. I have been reading his articles for a long time. He has been dead wrong with his bullishness on gold. He was calling for 1400 Gold not that long ago. Just go back and read his historical articles. The more appropriate advice is do the opposite of what he says. Man I hope he isn't getting paid for this!!
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