• 6 hours $15/Hour Minimum Wage Might Happen Naturally
  • 24 hours Could This Be The Hottest Investment Sector For 2021?
  • 2 days The Single Most Exciting Mental Health Breakthrough Of The Decade?
  • 2 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
  • 4 days Pipeline Hackers Lose Access To Ransom Funds
  • 4 days Military Coups Are Big Business
  • 5 days Crypto Market Crashes As Tesla Turns Its Back On Bitcoin
  • 6 days Gold Bulls Are Facing An Uphill Battle
  • 7 days Has The Dogecoin Hype Fizzled?
  • 9 days America's Semiconductor Shortage Is Just Getting Started
  • 12 days The EU Begins Backtracking On China Trade
  • 13 days Americans Are Sick Of Unfair Taxation
  • 15 days No Jab, No Job: The New Hardline Policy of U.S. Employers
  • 17 days What’s Included In Biden’s $6 Trillion Economic Plan?
  • 18 days The “Great Car Comeback” Brightens Oil Demand Outlook
  • 19 days The 3 Most Profitable Covid-19 Vaccine Stocks
  • 21 days Beijing Launches Digital Currency To Break AliPay-WeChat Duopoly
  • 22 days The New Economic World Order After Covid-19
  • 26 days 3 Signals To Watch For A Stock Market Correction
  • 28 days Netflix Earnings Red Alert: Subscriptions Could Underwhelm
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

Contact Author

  1. Home
  2. Markets
  3. Other

Speculators Are Finally Bailing Out Of Gold – And That's A Good Thing

All this talk of massive new infrastructure spending financed with a tsunami of freshly-minted currency should be lighting a fire under gold. That it hasn't is a testament to how out-of-whack the precious metals market had gotten during the first six months of this year.

As gold rose, the futures contract traders whose games tend to dictate near-term price action had set the metal up for a fall. Specifically, the speculators (who are always wrong at the extremes) were ridiculously long. With the suckers all-in, a big correction was needed to restore balance.

But it didn't come. Several months passed with gold treading water, leading some to wonder if the paper market tail had finally stopped wagging the physical market dog.

Now the long-overdue correction seems to have arrived. Gold is down 11% from its recent high, and the speculators are bailing. Here's the Commitment of Traders (COT) report (courtesy of GoldSeek) for the week ending Tuesday the 15th showing a 17% drop in large speculator long positions. That's a huge move for a single week. And based on the price declines of the subsequent three days, it's likely that the next report will show a similar drop.

Meanwhile the commercial traders - the guys who sucker the speculators into these unwise bets - cut their short positions by an also notable 9%.

Typically, a bottom occurs when both commercials and speculators are flat -- that is, carrying more-or-less equal long and short positions. The latest report is still a long way from that kind of balance. But another few weeks like the last one and this indicator, at least, will be screaming “buy”.

 

Back to homepage

Leave a comment

Leave a comment