Gold prices drop 1%. Is $1,150 next?
Bears yelling sell. That is how bubbles are made
US Bank Gold Positions Explode By Highest Rate On Record; Short Positions Collapse
In a fascinating reaffirmation of the fundamentals of the gold bull market, US Banks & Large Traders as defined by the CFTC as being, “commercially engaged in business activities hedged by use of the futures or option markets,” have quietly flipped from being tremendously short gold in late 2012, to now being tremendously long.
Furthermore, the speed of this change in positioning has occurred at the fastest rate since the data set began in mid-2000.
As shown below, on a month over month basis, US Bank & Large Trader long positioning has increased dramatically, with short positions being covered at the greatest rate of speed ever recorded
Additionally, when looking at this trend from a “total-position” perspective, we see an even greater accumulated move being made on both the long and short sides. Short positioning by US Banks & Large Traders has been collapsing since the beginning of 2013, while long positions are being steadily accumulated
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U.S. stocks were able to evade the rout in Asia, but gold wasn't so lucky.
In fact, the precious metal has been one of the most jittery asset classes this year.
Gold prices plunged to a two-year low in April on worries about slowing growth in China. Investors also shunned gold in favor of stocks, which have had a record-setting run this year...before all the recent volatility.
Gold prices dropped more than 1% Thursday and currently hover around $1,377 an ounce.
After years of moving higher, gold prices are now down nearly 30% from all-time highs above $1,900 an ounce hit in mid-2011.
While gold bulls are often the most vociferous in their defense of the metal's enduring value, talk of a sharp fall in gold prices easily spooks investors.
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