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What Professional Futures Traders Think of Gold

|Includes: DBV, DIA, FXA, FXC, FXE, SPDR Gold Trust ETF (GLD), SDS, SLV, SPY, UDN

A friend asked if anyone had seen short interest on gold. Not quite my specialty, but did a quick check.

 

Points to Note from the Latest Commitments of Traders Report of Sept 11th  on positions as of Sept 8th [see table below]:

 

Non-commercial traders (i.e. speculators) are long gold almost 10:1. They are more indicative trading market sentiment than commercial traders. Their long positions of these speculators grew almost 10x as much as short positions in the latest report.

 

Commercial trader positions moved in the opposite direction, though not by as great a magnitude. They were short gold about 4:1. Short positions grew over the most recently reported week by about 25x. Commercial traders trade more on the spot market.

 

I don’t know where to get historical data to see if these figures indicate extreme sentiment or not, no my conclusions are limited. They include:

 

Speculators and commercial traders appear to have a rather opposite position on gold’s near term future based on the below table.

 

The growth in long positions by speculators and short positions by commercial traders appears to reflect strong sentiment, though again, I don’t have historical data to confirm that.

 

 

Typically gold demand increases with increased optimism about inflation, which usually comes from increased belief in spending and growth.  So this swing in sentiment is curious. Most central bankers believe growth over the coming year will be sluggish at best, and no one believes the employment (and thus consumer spending) picture will improve any time soon.

 

Why the move?

 

 

Source: http://www.cftc.gov/dea/futures/deacmxlf.htm

 

 

Comments or guidance welcome.

 

Disclosure & Disclaimer: the opinions expressed are not necessarily those of AVAFX. The author has no position in the above instruments.