Precious Metals Forum

Go Back   Precious Metals Forum > Precious Metals and Economic News > Gold Bug

Reply
 
LinkBack Thread Tools
Old 01-15-2015, 07:41 AM   #1
Golden Cockroach
 
PMBug's Avatar
 
Join Date: Oct 2011
Location: In Scrooge McDuck's vault
Posts: 7,024
Liked: 2447 times
Trader Dan: Hedge funds buying gold again

Quote :
...
Now that there are some concerns about global growth and equities are looking a bit wobbly, gold is getting a bit of a look from some speculators who are cautious at the moment. This can be seen in the return of some hedge funds to the long side of the gold market at the Comex ( although I should note that the gold ETF, GLD, continues to display an amazing lack of interest on the part of big Western-based institutional buyers ).

The blue line shows the NET POSITIONING of the hedge fund community. The Red line shows the gold price. As you can see, as the NET LONG Position has increased, so has the gold price. The two track each other EXACTLY.

Something I do want to note however that really stands out for me when I see this chart and analyze it in detail.

Beginning in 2013, while the relationship between the gold price and the net positioning of the hedge fund community remained intact, something happened. Can you see it?

From that point forward, the build in NET LONG positions by the Hedge funds HAS NOT resulted in successively higher gold prices. The opposite is the case. In other words, it is taking more and more buying by Hedge funds to move the price of gold higher but the end result is that the gold price is at lower levels than such levels of net longs would have taken it in the past.

For instance, look at this week's net long level by the hedge funds. It is currently a bit over 106,000 futures and options combined. A similar level of hedge fund exposure to the gold market back in January 2013 had gold sitting above $1650!

How to explain this ? Simple - While hedge funds have been recently expressing an interest in playing gold from the long side over the Comex, there remains a correspondingly increasing amount of WILLING SELLERS of the metal. To see gold sitting closer to $1200 than it is to $1700 when the net long positions of the hedge fund are at the same level as they were TWO YEARS ago tells me that a very large number of players in gold do not expect high prices in gold to last.
...
More (incl. graph): http://traderdannorcini.blogspot.com...-gold-but.html

It would be interesting to know who the WILLING SELLERS are. Are they also hedge funds, or central banks (or their proxies)?
__________________
The journey of a thousand miles begins with a single step. - Lao Tzu

Important stuff: PMBug 101 * Forum Guidelines * Support PMBug
PMBug is offline   Reply With Quote
Old 01-20-2015, 08:20 AM   #2
Golden Cockroach
 
PMBug's Avatar
 
Join Date: Oct 2011
Location: In Scrooge McDuck's vault
Posts: 7,024
Liked: 2447 times
Originally Posted by Trader Dan :
... although I should note that the gold ETF, GLD, continues to display an amazing lack of interest on the part of big Western-based institutional buyers ...
Not so fast!

Quote :
... $GLD holdings rise from recent record lows Jan-8 to 23.5M ozs
https://twitter.com/goldseek/status/556237061527592961
__________________
The journey of a thousand miles begins with a single step. - Lao Tzu

Important stuff: PMBug 101 * Forum Guidelines * Support PMBug
PMBug is offline   Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Index funds rebalancing - buying gold and silver PMBug PM Bug 6 01-16-2014 10:07 AM
Karatbars - Gold as Hedge against Inflation and Ultimate Currency stangar Marketplace 1 03-26-2013 06:08 AM
Pacific Group Hedge Fund Converting 1/3 Assets To Physical Gold Unbeatable Gold Bug 5 01-22-2013 07:09 AM
Deciphering Silver - Trader Dan PMBug Silver Bug 9 07-05-2012 04:40 PM
Asian hedge funds facing forced margin call selling? PMBug Gold Bug 0 10-20-2011 09:10 AM


All times are GMT -5. The time now is 05:42 AM.


Powered by vBulletin® from Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.
Content of PMBug.com copyright © 2011 - 2019 Measuring Up. All Rights Reserved.