by David Kranzler
Investment Research Dynamics
The price of gold ran up 20% since the beginning of 2016 through early March. In response to “overbought” readings in the popular momentum indicators, the superficial gold commentators become short term bearish. Additionally, based on what appeared too be a heavy “off-sides” in the bullion bank net short position vs. the hedge fund net long position in Comex gold futures, per the Commitment of Traders report, the “big price correction” side of the ship deck became heavily mobbed with short-term timing forecasts.
About two weeks ago, I decided to roll up my shirt sleeves and dirty up my hands with the COT data compiled by my business partner going back to early 2005. What I found in terms the current net short / net long positioning between the bullion banks and the hedge funds might surprise a lot of observers.