Back in June 2013,
when gold was making its lowest price low since early 2011, I pointed
out that commercial gold futures traders were at a really low net short
position according to the Commitment of Traders data, and that this was a
meaningful sign of a price bottom. Now we are seeing a similar
condition in the commercial traders' net position, which is conveying a
similar message.
The Commitment of Traders (COT) Report is published each Friday by the CFTC, showing traders' positions as of the preceding Tuesday, and broken down into 3 groups: Commercial traders (big/smart money), non-commercial traders (large hedge funds), and non-reportable traders (small-time traders who as a group typically do the opposite of what ends up being a good idea). The commercial traders are generally the ones to bet with, but there is a big fat caveat: often the commercial traders will get to a big skewed condition early, and so while they may end up being right in the long run, betting with them too early can get expensive. (more)
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The Commitment of Traders (COT) Report is published each Friday by the CFTC, showing traders' positions as of the preceding Tuesday, and broken down into 3 groups: Commercial traders (big/smart money), non-commercial traders (large hedge funds), and non-reportable traders (small-time traders who as a group typically do the opposite of what ends up being a good idea). The commercial traders are generally the ones to bet with, but there is a big fat caveat: often the commercial traders will get to a big skewed condition early, and so while they may end up being right in the long run, betting with them too early can get expensive. (more)
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