We’ve been bullish precious metals since the 4th quarter last year and even coming into 2019. We’re not gold bugs, thank goodness. The risk vs reward was just skewed in favor of the long side, for a variety of reasons.
One of those was the fact that commercial hedgers were actually net long. They’re never net long, and literally always hedged. For me, these Commitment of Traders reports are usually just noise, EXCEPT when they’re at extremes. We want to pay attention when the rubber-band is stretched. And so we did, and Gold ripped!
Now we have the opposite scenario. Commercial Hedgers last month had on their largest net short position in history (345,145 contracts): [Read more…]