Strange Things Happening In The Paper Gold Market

by John Rubino, Dollar Collapse:

Back in September the hedge funds that speculate with gold futures contracts got extremely bullish, which – since speculators are usually wrong when they’re overexcited – was a signal that gold would be going down for a while. It did:

Gold-price-Oct-17.jpg

Then things departed from the usual script. A falling gold price tends to make trend-following speculators bearish, which leads them to close out their long positions and expand their short bets. It also leads commercial players – the banks and fabricators that tend to be right at turning points – to start shifting from short to long.

But not this time. As the most recent commitment of traders (COT) report shows, speculators are staying long and commercials are staying short.

Gold-COT-Oct-17.jpg

Here’s another way to visualize the process. The gray bars on the next chart represent the speculators and the red bars the commercials. Note how their positions tend to move in waves either away from or towards the middle line that represents zero. But lately their positions have flattened out.

Gold-COT-football-Oct-17.jpg

Read More @ DollarCollapse.com