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Gold & Silver COT Report: A Sentiment Shift By Speculators Is Needed

Gold & Silver COT Report: A Sentiment Shift By Speculators Is Needed

Speculators drive markets, not commercials. The fact that they are still net long overall concerns me in the sense that while bullishness towards gold is certainly on the wane, we have not yet seen a DISGUST with the metal that tends to make capitulation phases. Too many speak of capitulation in gold. How can that be when speculators remain as NET LONGS?

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Excellent Analysis of Gold’s Trend

| November 24, 2013 | Category: Technicals
Excellent Analysis of Gold’s Trend

This is the reason I have been bearish on gold now for some time – the charts are indicating that bearish pressure is building in the market and is hinting at building across all three time frames. It is imperative for gold bulls that the price recovers strongly before the end of this year to prevent heading into the New Year with a strong bearish bias. What worries me about gold is that the hedge funds still remain NET LONG, even if that position has shrunk to relatively low levels. That means that there remains more than enough firepower to take this market lower if those remaining long positions have to be jettisoned in the event of a breach of downside chart support.

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Black Gold Poised To Shine

| November 17, 2013 | Category: Technicals
Black Gold Poised To Shine

On the other hand, if Gold moves higher next week, Gold bugs should be fearful. With Gold at 25 days from the last DCL, a move higher through the 10dma ($1,294) and the declining trend-line will confirm that a new Daily Cycle is in play. On the surface, a new DCL is bullish, and many investors will interpret and trade it as such. But a new Daily Cycle will likely be the 5th in the current Investor Cycle, so should fail and lead to significant low.

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Gold Forwards Rate Spells Short Term Pressure On The Gold Price

Gold Forwards Rate Spells Short Term Pressure On The Gold Price

Gold forward rates returned negative again. The shortage appeared to be prominent again, gold prices started to adjust accordingly. I think this pattern continues until either the dollar market is solved (not likely from what I see) or demand for true tail risk insurance rises enough again to overcome this cage.

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Physical Gold Shortage Signaled Again by Negative Gold Forwards Rate

Physical Gold Shortage Signaled Again by Negative Gold Forwards Rate

The “counterintuitive” observation about the GOFO rate is that it has turned down several times this year right before a significant gold price drop occurred. A declining GOFO rate should be indicative of stress in the repo and collateral market, a rising gold price should reflect this (in “a normal world”, although the rules appear different in “the new normal”).

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