by Craig Hemke
While not the only consideration in forecasting price, it’s always important to note the current COMEX contract balance. As the FOMC meets again this week, let’s look under the hood to see whether or not positions are at extremes versus recent history.
As you know, this has already been a strong year for COMEX Digital Gold. Price ended 2019 right at our forecast of $1520, and it has already met our 2020 forecast of $1750-1800. See more here: https://www.sprottmoney.com/Blog/gold-and-silver-2…
So is that it? Will price now fall through the remainder of the year? Last Friday’s U.S. jobs report certainly brought many of the permabears out of hibernation, with rushed forecasts of steep price drops ahead. However, a sharp drop in COMEX prices is usually caused by a wash out of overly-exuberant speculators, many of whom had placed unusually large and aggressive positions. Taking the short side of these trades is almost always a bullion bank trading desk. Thus, when Spec positioning gets crowded long, Bank positioning is always heavily short.