From the Desk of Ian Culley @IanCulley
We all learn how to fall – the sooner, the better.
As adults, we forget this is one of the first skills we learn early in life. For better or worse, my one-year-old reminds me daily.
He’s amazing.
Yes, I’m one of those proud, doting fathers. But his coordination and acrobatics keep both of us out of the pediatric ER (and me, the doghouse). He pops right up whenever he hits the ground and keeps chasing his older brother.
Pure gold.
Since my mind is always lost in the charts, his agility and doggedness remind me of gold’s resilience during the past two years.
You often hear us refer to markets correcting through price or time. It’s an important concept that can reveal underlying strength.
The dual-pane chart of copper and gold futures presents both:
Gold corrects through time as copper corrects through price after breaking down earlier this year.
While gold reminds me of my youngest, copper’s correction looks more akin to my four-year-old’s busted chin. He recently ended up with multiple stitches after slipping and falling on a balance beam.
He was a champ, of course, and everyone agreed. (I told you, I’m a doting father.)
It didn’t take long for the little daredevil to start climbing again back on the playground. But he had to repair the damage – much like copper is doing now.
In the process, he learned a valuable lesson. Balance beams are lame!
Meanwhile, copper is finding support, while gold never really fell. That’s the difference between correcting through price and time.
Say what you will about precious metals: Opportunity cost, hot mess – it’s all true. But you can’t deny they know how to fall.
Gold and precious metals have my full attention as they look to get back on their feet.
Stay tuned!
COT Heatmap Highlights
- Commercial hedgers hold their smallest net-short position for crude oil in three years.
- Commercials lightened their long exposure to coffee, dropping more than 3,000 contracts this week.
- A potential unwind is underway in gold, as commercials added almost 13,000 contracts to their net-short position.
Click here to download the All Star Charts COT Heatmap.
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