I'll repeat – has gold finally hit a low?

It must be prudent for gold bears to take at least some money off the table, says John C Burford. It's time to look to the long side.

On Friday, something important happened: gold (and silver) rallied hard. But that should have happened on Thursday on Draghi Day when the euro rocketed by over three cents, and the German Dax stock index plunged by 4%. Yet gold remained unmoved. Surely, most would have expected gold at least to reflect Thursday's much weaker dollar?

After all, the 'reason' gold has been so weak is that the US dollar has remained strong or so the pundits maintain. But does this explanation hold up now? I think not.

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(Contracts of troy ounces)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 536,215
Commitments
160,479147,438118,844218,055225,105497,378491,38838,83744,828
Changes from 11/24/15 (Change in open interest: 806)
-1,6135,5902,2633,163-6,3703,8131,483-3,008-677
Percent of open in terest for each category of traders
29.927.522.240.742.092.891.67.28.4
Number of traders in each category (Total traders: 343)
1391341185354255250Row 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.