COT Gold Charts 2.0, page-19

Another week and more huge moves in COT gold data. All moves in same direction as of the past month, with speculators running away from longs and heavily adding shorts, as usual, commercials have done the opposite as the overall balance between long and short is fast approaching equilibrium - which is rare and was last seen when gold traded ~$1,050. We all know what happened then, and we're currently $1,230 and at almost similar COT spreads to bear market lows. Does this mean we are finally forming a medium to long term bottom? If history is anything to go by, then the analysis states a resounding YES.




Large speculators and commercials are now at overall positions not seen since January 2016 when gold was trading ~$1,080. Open interest has dropped off a cliff and the overall balance between long and short is rapidly approaching zero which correlates with the lowest point in the price of gold over the last seven year bear market ~$1,050.



Big increase in commercial long positions, again, not seen since the gold lows of ~$1,050.



Commercial rate of change continuing its positive bias for a record five weeks, they're getting bullish gold.

  
Large speculator short position is almost off the chart! These guys will be absolutely cleaned out should gold head higher, expect mass short covering. The large specs have never been right long term in the gold market and typically get cleaned out by the commercials - why should this time be any different!?

I thought gold would head down to $1,180 where there is multi year support. However, after viewing the current COT data, it is highly likely that gold has already bottomed above $1,200. There's possibility of another bear raid in this cycle which would only have the affect of pushing the market even closer to equilibrium. The gold price today is $180 higher than its current bear market low, considering that COT data is close to that period it's not much of a stretch to conclude that the price of gold will be heading north in the not too distant future. With record levels of large speculator short positions, the coming bull market in gold will be rapid and last for months as the large speculators fall over themselves to cover their massive short position bets.

A medium term gold bull market is in countdown.

Cheers
Seth