Gold Commitments of Traders : Worrisome

Jon Gold, Market Commentary, Precious Metals

To sum up my view of this week’s COT report in one word…. WORRISOME.
I use that word because of what we saw happen to the safe haven trades today on account of that monster rally in the US equity markets.
Gold was under pressure for the entirety of the session today but seemed to especially weaken into the late afternoon hours as the US equity markets kept pushing higher and went out near the highs of the day. That more than likely will translate into additional downside followthrough in Asian trade Sunday evening. Where it goes after that will depend on whether or not dip buyers show up.
Let me show you why I am concerned.

First of all, on this TWO HOUR CHART, you can see that there was a huge spike in volume last Friday during which gold ran to $1280. Recall that was the day that the payrolls data was released. Yesterday, the day of the announcement by the ECB of additional stimulus measures to be implemented, gold spiked higher but then faded. Notice that the volume was lower. That is a warning that bulls should not ignore.

This post was published at Trader Dan on March 11, 2016.