COT Gold Charts, page-19

Hi AJ. Read the article again and you will see that the thematic is not about commercials "short covering" per se. It was all about speculators cashing in their longs. The trigger was some very big traders/hedge funds taking advantage of the election night Trump spike and cashing in their longs thus causing a huge turn down in POG and thus sentiment. Negative sentiment flowed quickly down hill from there. That is what happens in the highly financialised derivative markets.... sentiment turns on a dime.

Just in case you have over looked the biggest factor with spot gold pricing let me say this again...... it is all driven by the futures market using huge leverage and an unbelievable 500:1 ratio of spec v spec trades for every one hedger v spec trade. The world is a crazy place and getting crazier! Actual fundamentals are secondary factors and a long way behind perceived fundamentals. Often these perceived fundamentals turn out to be misperceptions...... maybe that is why contrarian investing in this asset class is profitable more often than not??

Anyway, the interesting point to now watch is the fact that the extreme positions of traders v commercials (mostly bullion banks and thus market makers) has returned to a much better balance. That is an early indicator that the next swing higher in POG is closer than most realise. I'm not saying the POG can't go lower because the traders could easily drown in the present negative sentiment and start heading towards net short positions. If that happens there will be more short term pain in the POG before setting up a huge 'short squeeze' opportunity for big market players to use to their advantage sooner or later. If that event does eventuate then I expect the sentiment for gold will turn positive very quickly. Swings and roundabouts or something like that.

Cheers