Monday, March 21, 2011
Gold This Morning: Revenge of the Contrarians --Jonathan
Sturdy trade overnight opened with ~$8 gap over Friday's close and prices have worked higher since with a blue collar hammering consistency. I want to focus immediately on several startling facts which occured over the past few days. Gold open interest as of last Thursday fell ~4000 contracts to ~498,000...given last week's lively exertion, that provokes visions of short covering or shaky sellers... why? Exhibit one... late Friday's COT release (basis always the prior Tuesday) had large specs selling long positions and increasing shorts... small specs, the odd lotters,were even more aggressive selling longs and increasing shorts. Exhibit two... in one of the strongest weekly moves since the days when Barrack was covering their short book, commercials, who never met a forward short they didn't like continued their contrary recent trend and increased their long book by ~10% and covered shorts. Meanwhile down at the COMEX, seats for the right to look eye-to-eye with other traders of gold, silver, and copper in the ring have risen sharply, since languishing ~$50,000 late last year, to a $90,000 print on Friday. Bottomline: compelling facts that those who trade gold for a living and not as a spec are putting their own dough up. Today: The combination of GSR continuing the liquidity high sign, RSI ~60, and current gold prices challenging a number of older high peaks is a salivating meal for a reminder that I often give my children...sit at the banquet table...don't be a waiter.