Net commercial gold dealers
dropped further their positions,
which are now at the lowest level
since May 31st. However, the
positions are still sizeable. Large
speculators (hedge funds and
managed money) further took their
losses (attachment 1).
In the silver market large speculators
reduced their positions taking the losses.
Net commercial silver dealers also
reduced their short positions, which
historically are still large (attachment 2).
The KITCO Gold Survey indicates that
Wall Street and Retail investors are in the short
term still in the bullish camp. This is not a
good sign (attachment 3).
The Gold Barometers are neutral for
precious metal stocks and physical gold
and silver (attachment 4).
The Gold hourly chart (attachment 5)
shows that gold went nowhere last week.
As a matter of fact gold was unable to rally
after the sharp losses of the week prior.
Gold lost US$ 5.00 per ounce last week
(New York time 4:00 p.m.) to US$ 1,252
per ounce. It all looks that a test at the
US$ 1,200 per ounce will follow.
Gold stocks always outperform the physical
gold price in an environment of rising gold
prices. On the other side, falling gold prices mean
that gold stocks decline sharper than the gold
bullion. The attached chart 6 shows that the
ARCA Gold Bugs Index (HUI) climbed from a
low of around 100 in January 2016 to a high of
around 285 by August 2016. HUI lost about 30%
over the last two months, whereas the gold bullion
declined around 9%. The HUI Index has just
fallen a bit below the 200-day moving average
(attachment 6).
