Hedge funds turn bearish on the gold price

Far from being the lone predators of popular imagination, hedge funds herd together, says John C Burford - a telling indicator for chart-following traders.

On Friday, I suggested that, because trader sentiment has turned very bearish towards gold, we may see a decent counter-trend rally sometime soon.

I realise this would disappoint the army of gold bears, who believe gold is heading for the $1,000 level and beyond.

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(Contracts of 100 Troy ounces)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 403,840
Commitments
144,06282,71029,266190,317256,102363,645368,07840,19535,762
Changes from 11/05/13 (Change in open interest: 17,044)
-4,96924,8155,61411,603-16,51212,24813,9174,7963,127
Percent of open in terest for each category of traders
35.720.57.247.163.490.091.110.08.9
Number of traders in each category (Total traders: 289)
10294745860203197Row 8 - Cell 7 Row 8 - Cell 8

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.