Gold rising? No — the dollar’s falling
By conventional measures on Comex, gold is now vulnerable to a correction. But there’s growing evidence that there are other forces at play
The last data point for the net long position for hedge funds was 17 September (COT report) due to be updated on Friday. Since then, open interest has increased by 28,256 contracts on preliminary figures for yesterday (Tuesday). That implies that this category of trader (managed money) is net long of about 240,000 contracts and therefore highly vulnerable to a bear raid by the swaps (bullion bank traders and market makers). And note how the rise in their net position is in lockstep with the price. But there is other evidence which we cannot ignore and is a new factor in the market.
What are the hedge funds selling to buy gold futures? This is my next chart and it is scary:
