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Great News For (The Remaining) Gold Bugs: Gold AND Silver Futures Speculators Are Now Net Short

by John Rubino ◆ August 17, 2018 5 Comments

Google “yield curve inversion” and you’ll see that analysts have been waiting for this indicator to send its big signal for years. It’s getting close, so expect a flood of breathless/ominous headlines when it finally happens.

The precious metals market has a similarly rare and portentous indicator: “net short speculators.” But today this one actually happened. In the latest commitment of traders (COT) report, both silver and gold speculators finally took on more short positions than long. This is rare because speculators are almost always net long – that is, betting that precious metals will go up rather than down. And it matters because speculators are usually wrong at big turning points. In other words, when they’re convinced they’re right, they’re usually wrong. And this week they became just about as certain as they’ve ever been that precious metals are going to tank.

Here’s gold…

Gold COT report speculators

… and silver:

Silver COT report speculators

Here’s the same stat for gold in graphical form, with the gray bars representing speculator positions. What used to be a big long bet has evaporated:

Gold COT report chart speculators

A similar apparent capitulation happened this week in the precious metals mining stocks, with some huge drops in securities that were already way down. The GDX gold mining stock ETF is pretty much representative:

GDX share price speculators

This kind of quick, hard move is often what it takes to set the table for better times. Nothing is guaranteed in life, but paper market speculators abandoning hope while physical demand from China, India and Russia remains strong does seem to create a low-risk, high-potential-return entry point for both bullion and mining stocks.

 

Emigrate While You Still Can

Comments

  1. rocmon says

    August 17, 2018 at 10:28 pm

    Soon come for real?

    Reply
  2. Austrian Peter says

    August 19, 2018 at 6:03 am

    But isn’t this to be expected as the dollar strengthens?

    https://www.macrotrends.net/1335/dollar-vs-gold-comparison-last-ten-years

    Reply
  3. Lone Sheep says

    August 19, 2018 at 10:38 am

    2 or 3 months ago, I heard the same story. But it didn’t work, crushed hard instead. Why such a bright man John Rubino could be fooled by the same tactics? Why couldn’t you see CRT report is rigged as well as the price mechanism?

    Reply

Trackbacks

  1. Breaking News And Best Of The Web - DollarCollapse.com says:
    August 18, 2018 at 4:29 am

    […] 8/18    Gold and silver speculators go net-short: major buy signal – DC 8/18    The curious case of a revolutionary (but imaginary?) superconductor – Wired 8/17    Gold heads for its worst week in more than a year – CNBC 8/17    Wheaton Precious Metals reports good Q2 – Yahoo 8/17    The case for buying gold miners as the group sinks to 20-month lows – CNBC 8/17    Precious metals miners are capitulating – Seeking Alpha 8/17    Dave Kranzler: Metals bashed as in 2008 to hide dangerous weaknesses – GATA 8/17    The steady slide in the price of gold — and bitcoin – Forbes 8/17    Keith Weiner: Bond paying interest in gold would confirm metal’s role as money – GATA 8/17    GoldCore: Gold’s counterintuitive fall may be official intervention – GATA 8/17    Perth Mint launches first government-backed gold ETF – GATA […]

    Reply
  2. When A Junior Gold Miner Gets It Right - DollarCollapse.com says:
    August 27, 2018 at 10:30 pm

    […] in your net worth. Once you experience a few of these it’s hard not to crave the next one. And if gold does what it ought to in coming years, there will be many more Great Bears to keep us […]

    Reply

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