“The one thing we are pretty confident in predicting is that the current downward impulse for gold will exhaust itself at some point. When it does, there is a tremendous amount of “high octane rally fuel” already in place to make watching for it very interesting. “ – Quote
- Huge Rally Fuel in Place for Gold Futures!
What can move markets is the action of the largest traders of gold futures. As long time members of the Got Gold Report know we track the positioning of the largest traders of futures through their reported positioning to the Commodity Futures Trading Commission (CFTC) in weekly commitments of traders reports (COT).
Tracking the large trader positioning won’t tell us what they will do tomorrow, exactly, but when we compare large trader positioning today with similar periods in the past, we can gain at least some insight into what the largest, best funded and presumably the best informed traders of gold futures might do looking ahead.
Extreme Positioning in Gold Futures
We track and chart about a dozen different trader positions each for gold and silver, but today we will tell the story we are seeing using just a few of the graphs. Only rarely do we see truly anomalous or extreme positioning in large trader positioning, but the positioning today certainly qualifies as both anomalous and extreme as we think you will agree.
Take, for example, the chart below(top of post), which tracks the positioning of the very large traders the CFTC classes as Producers, Merchants, Processors and Users – the natural hedgers of gold via futures. This category includes the largest bullion merchant/dealers, the refiners they buy from and who buy the rough gold from producers; as well as the producers themselves. It includes jewelry merchants and manufacturers, bullion management firms and it also includes the bullion banks that many of them end up trading through.