Gold Speculators Flushed Out

Thursday’s Commitment of Traders (CoT) report reveals managed money went net long 67,207 paper-gold contracts with the price of gold (PoG) at $1,118. That’s a net-long reduction of 46,885. Add 570 for small specs and the run rate is very close to what I predicted and projected: net 1,000 per a $1 move in PoG.

The producer-user category was far less aggressive covering shorts than the swap dealers. Its net reduction was 13,720. Judging from the big pickup in volume through Friday, this group did its work post Tuesday’s CoT, as the PoG finished at $1,090. With a run rate of 1,000 per $1, managed-money slingers are now sitting below 40,000 net long, having tossed, liquidated and shorted 75,000 contracts, or 7,500,000 ounces of paper gold, in just eight trading days. As usual, the excessive shorting from the specs is coming in the last stage of the swoon, after PoG had already been hit.

POG has fallen in thirteen of the last fifteen days. That’s the first time this has happened in forty years.  The last one put POG 10% higher three months later.

This pattern is getting very old and I think reflects final capitulation. The issue, to my thinking, is that if one is going to be a gold investor as opposed to a flip trader, one can’t get into a tizzy every time the managed-money rabble hits net long 80,000, or even 100,000. In a bull market, that isn’t that high or excessive. I actually think that managed money wants to get and stay long gold. One can take some off the table, but if you take too much, one of these moves will be sustained and maintained.

Indexes GDX and GDXJ did fine up until the last two days, when they fell victim to the latest Comex over-trading and over-shoot. This was facilitated by Fed gibberish and bogus job numbers. A tremendous myth and falsehood has been built around gold and token rate increases off of near-zero. I would go so far as to say some rate hikes are precious-metal positive. In part, this is because the mountain of derivatives will be disrupted. Secondly, it will increase the carrying cost for paper financing of Comex over-trading.

It’s rather obvious that there are criminals on the inside that get the gibberish and made-up numbers in advance and trade on it. Most of us on the outside know full well the economic and social conditions of the U.S. and thus are not really able to play this racket. Most of us on the outside can easily see the supply and inventory situation in Comex gold, where a mere 151,000 ounces backs up all this paper.

I would go so far as to state that these criminals want the average Joe to leave his money in the banks or in money markets, where it can then be stolen via bail-ins. Yes, Martha, bail-in provisions are in place, as are the warnings. With the western central banks cleaned out, these Crime Syndicate satanists then empty out the vaults in places like Venezuela. This gold then goes into their private vaults just as much as it goes to China.

The net longs in silver stayed more elevated and were reduced by only 4,757 net. That’s with the price of silver at $15.35, but I had hoped for more. Silver might still have a little work left, but gold looks flushed out.