Commercial traders are net long gold. What's going on?

Some of the commercial traders are market makes who take the other side of trades and are hedged. The other portion of commercial traders are the metal producers.

The metal producers (mining companies) are always net short. That is how they sell product.

Small speculators are also net long. Thus the big specs (hedge funds) are short gold futures in record amounts even though the size of the bar appears insignificant.

Open Interest

Image placeholder title

Long and Short Positioning

The lead-in chart shows commercials are net long and hedged funds net short by small amounts.

But commercials are producers or hedgers, while speculators generally aren't, so a look only at "net" positions is misleading.


Short Squeeze Material

The yellow highlights above constitute positions that are subject to a huge short squeeze.

One can also say longs may bail, but if that happened in isolation, the overall bearish sentiment against gold would be even higher.

Gold Weekly Chart

Image placeholder title

Gold sentiment is even more bearish than it was before a major blast higher starting December 2015.

Record bearish sentiment of this nature by hedge funds is seldom rewarded.

Mike "Mish" Shedlock

Large Specs Net Short Gold First Time Since 2001: Buckle Up!

Large specs are net short gold but commercials are still slightly short because small specs are long enough.

Gold COT Update: Big Specs Increase Shorts

Commercial gold traders are still short, but barely.

Speculators Throw in the Towel on Gold

Long Liquidation: Large specs reduced long gold bets and increased short gold bets. Small specs increased longs & shorts

Putting the Cart Before the Horse: Gold Hype

The commercial short positions in metal futures are decreasing. But what's really going on?

Gold Bears Press Bets in Record Numbers

Gold shorts are near a record high as saturating bearishness sets in.

Silver Looking Better Than Gold?

Based on Commitment of Traders (COT) data, John Rubino at Dollar Collapse prefers silver over gold.

Investigating the Claim "Speculative Shorts Driving Gold Lower"

Are speculative shorts "driving or contributing" to the move lower in gold? Let's investigate.