We've referred to gold's "stately decline" and have an ultimate price target of $875 but now's the time to look at the Commitment of Traders reports for a possible pause.
While we place less weight on the CoT's than many analysts, they can be helpful to point up short term trend changes, simply because over time the commercials have to be right or they go out of business and the game ends for everyone.
Here's gold via FinViz:
Note that the commercial hedgers have been pulling in their shorts since January and are approaching a net flat position.
This doesn't mean an immediate explosive move to the upside, just that being short is getting more dangerous until the commercials move any inventory they've been accumulating.
From Reutes via Kitco:
PRECIOUS-Gold hits 17-month low as investors seek refuge in dollar
Speculators raised net gold shorts to record -CFTCFront futures
* GRAPHIC-2018 asset returns:
* Weak rand supports platinum production in South Africa
(Updates throughout, changes dateline from LONDON)
By Zandi Shabalala
LONDON, Aug 13 (Reuters) - Gold prices hit 17-month lows on Monday, losing out to U.S. Treasuries and a stronger dollar as investors sought refuge from a financial market rout triggered by a crashing Turkish lira.
Investors traditionally use gold as a means of preserving the value of their assets during times of political and economic uncertainty and inflation.
But it has this year failed to benefit as investors made a beeline for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars.
A higher U.S. currency also makes dollar-denominated assets more expensive for holders of other currencies, which subdues demand - a relationship used by funds to generate buy and sell signals from numerical models.
Spot gold had dropped 0.8 percent to $1,201.54 an ounce by 1053 GMT, its lowest since March 2017. U.S. gold futures were down 0.83 percent at $1,208.60 an ounce.
The lira has tumbled on worries over Turkish President Tayyip Erdogan's increasing control over the economy and deteriorating relations with the United States. "The safe-haven demand that has been triggered by the crisis in Turkey is going into the dollar rather than gold, which has been a trend going on for a while now," said Capital Economics analyst Simona Gambarini....MORE:
Gold $1204.00 down $15.00
Silver $15.10 down 20 cents
Platinum $809.60 down $20.00
And the silver chart:
This might be a good time to remind readers that it was the commercial's who crushed the Hunt brothers' silver play back in 1980. If interested see 2014's "On The Passing Of Nelson Bunker Hunt, Two Words".
