It’s becoming even more difficult these days to try to analyze a market that, for the most part, is standing still.
So we turn to the most recent Commitment of Traders (COT) Report to get an indication on what the major Wall Street players are reporting.
This past week the COT report shows that the long commitments were reduced by 11,365 contracts and the shorts increased by 1,895 contracts. So now the net long position at 35,337 is the lowest reported number since December 2015.
The results from this report are a pretty hot topic of conversation on the street and the business news channels. Everyone is now watching the Dollar index. Many traders are indicating that if the Dollar index reaches the next level of resistance at 95.66 a selloff in the price of Gold is expected which could bring the yellow metal below the $1,200 mark.
At the time of this report (8:20 am EST), the Dollar Index is at 95.32 up 15 points. So we have a ways to go but a move to that level can be only a news story away.
On the other side of the ledger, if we drop below 94.50 level a strong short covering rally can happen. As I indicated in previous editions of The Market Gage, the short position is unusually high and any news that can cause the market to rally can cause the market to short cover in a heartbeat. Click to watch Jim Kramer’s piece from CNBC’S Mad Money that was released just after our report last week.
Here is the most recent COT report:
GOLD – COMMODITY EXCHANGE INC. Code-088691
FUTURES ONLY POSITIONS AS OF 07/31/18
| Non-Commercial | Commercial | Total | Nonreportable Positions |
| Long | Short | Spreads | Long | Short | Long | Short | Long | Short |
| 209,255 | 173,918 | 48.128 | 145,254 | 193,172 | 402,637 | 415,218 | 50,018 | 37,437 |
(CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 452,655 COMMITMENTS
| CHANGES FROM 07/24/18 (CHANGE IN OPEN INTEREST: -43,965) | ||||||||
| -11,365 | 1,895 | -10,490 | -17,386 | -35,136 | -39,241 | -43,731 | -4,724 | -234 |
| PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS | ||||||||
| 46.2 | 38.4 | 10.6 | 32.1 | 42.7 | 89.0 | 91.7 | 11.0 | 8.3 |
| NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 335) | ||||||||
| 166 | 98 | 82 | 51 | 43 | 260 | 184 | ||
Unfortunately, a wait and see posture seems to be the only way to stay involved in this market at this time. The U.S. Dollar is in control of the Gold market, so keeping a close eye on the activity is a must for anyone holding a position.
Have a wonderful Wednesday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.