Trading the gold market

As the price of gold rises ever higher, the gold market is displaying some very strange behaviour. John C Burford looks at the charts to find out why.

Something very strange has been happening in the gold market of late.

Last Friday, I noted the Commitments of Traders (COT) report had shown that the hedge funds, who dominate the market, had piled into gold.

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Hedge funds259,00055,000
Change in past wk(-32,000, -11%)(+11,000, 25%)
Small traders (us!)73,00027,000
Change on wk(+6,000)(+1,000)

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.