Speculators Remain Net Long as Gold Drops Lower

Jon Blogosphere, Gold, Market Commentary, Precious Metals

I picked the headline because I wanted to add the following: “And are losing money”. I am attaching two charts to this short post. The first is the overall COT positions from today’s report.
Take a look at the lines reflecting the positions of the various groups of speculators. Note that all three groups, the Hedge Funds, the Other Large Reportables and the Small Specs or general public, all remain NET LONG in gold. And guess what – they are all losing money. Also, what concerns me is that based on this Friday’s report, there are still more than a considerable amount of these losing positions left to unwind. As of the close of trading business on Tuesday ( the day through which the weekly report covers ) the price of gold was $1236.70. As of the close today, it was $1216.60 or another $20 lower. There is no doubt that the breach of downside chart support levels has taken out more of these spec longs, but the question is how much pain can they endure, especially when margin calls begin mounting?

This post was published at Trader Dan Norcini on Friday, September 19, 2014.