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Gold Shorts Pile On, Let's Investigate the Timing

Let's discuss action in gold, commitment of trader reports, and faith in the Fed.
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Gold chart courtesy of StockCharts.com annotations by Mish.

Gold chart courtesy of StockCharts.com annotations by Mish.

This post is inspired by a pair of Tweets by Fred Hickey on the COT position and a response to it.

The Managed Money position tends to be late in entry on the way up, and overstay  shorts and longs when reversals are at hand. 

Note that the Commission of Traders (COT) reports come out on Friday but reflect the position on the previous Tuesday. 

Gold Last Five Days 

Gold chart courtesy of StockCharts.com annotations by Mish.

Gold chart courtesy of StockCharts.com annotations by Mish.

Sometimes the trend followers get it correct and sometimes they don't.

Their timing has been mostly good this year but they missed out on some big moves  in the past few years.

On a different note, I am glad Hickey seems to have abandoned his practice of calling the commercials "smart money".

One set of commercials are the miners selling production, another set of commercials are the Jewelry producers and industrial users, and the third set are the hedged market makers who take the other side of trades. 

There is nothing either smart or dumb in commercial positioning. 

Let's go back a bit further.

Gold closed today near $1840.

US Dollar Fluctuations Have No Meaningful Impact On the Price of Gold

Dollar and Gold charts courtesy of StockCharts.Com annotations by Mish

Dollar and Gold charts courtesy of StockCharts.Com annotations by Mish

Flashback May 11, 2022: US Dollar Fluctuations Have No Meaningful Impact On the Price of Gold

In terms of gold, hardly anything has changed for a month although the miners have been hit hard, impacted by rising energy costs and liquidity issues.

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Gold itself brushed off a huge push up in the dollar since the beginning of 2021.

General rules about gold and the dollar don't work over significant period of time.

Gold vs Faith in Central Banks

Gold chart from St. Louis Fed, annotations by Mish.

Gold chart from St. Louis Fed, annotations by Mish.

I have posted that chart before and have not updated it for a while. Also, I am running out of room for notes. 

Is Everything Under Control?

No one can tell you where gold, stocks, or Bitcoin is headed, and I won't either because I don't know.

But I can suggest what a key driver of gold has been historically speaking. On that score, I like my chances.

Recent gold weakness reflects a bit of renewed belief in Powell. How much is warranted? And even if it is warranted, what are the odds of a currency crisis somewhere?

End of the 40-Year Bull in Debt and a “Global Depression” Threat

For discussion of the currency crisis idea, please see End of the 40-Year Bull in Debt and a “Global Depression” Threat

The discussion includes a video interview of Danielle DiMartino Booth who commented "If you want a front row seat with popcorn, follow the EM [emerging market] space."

This post originated at MishTalk.Com.

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