COMEX Gold Managed Money Traders Strongly Decrease Net Long Exposure – By Adding New Shorts
HOUSTON — As we already reported on Friday, traders classed by the CFTC as Managed Money (MMs), hedge funds, commodity trading advisors and other large non-commercial COMEX traders who trade gold futures for clients (and not for their own book) very strongly reduced their net long position for gold futures by 23,584 contracts or 29% (from 81,153 to 57,569 contracts net long) for the Tues/Tues COT week. That was in answer to a $29.46 or 2.3% drop in the price of gold.
Gold down 2.3% – Managed Money traders reduce net longs by a big 29%.
Incidentally that is the largest one-week reduction in MM net long positioning since November 12, 2013, when a $50 downdraft for gold coincided with a huge reduction of 31,977 contracts of net long exposure with gold then at $1267.
Notice that 22,345 contracts of the net long reduction this week was actually an increase in Managed Money shorts from 31,232 to 53,577 contracts short gold. So essentially Managed Money traders piled on to the short side of gold as it moved below some technical trigger point.
Looking at the graph above, notice also that the Managed Money traders tend to build a larger collective short position until the price of gold stops going down and reverses. That makes trend-following sense and it also hints to contrarians that the Managed Money traders are sowing the seeds of their own soon-to-be short covering.
That is all.
Source: http://www.gotgoldreport.com/2014/06/comex-gold-managed-money-traders-strongly-decrease-net-long-exposure-by-adding-new-shorts-.html
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