Why gold is set up for a good rally

Ever erratic, traders are ditching their long positions in the gold market en masse. That bodes well for a rally, says John C Burford.

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Now that the US has avoided the fiscal cliff, markets will be in thrall to rumours surrounding the horse trading that surrounded the debt ceiling negotiations, not to mention the postponed spending cuts' that will loom large in January.

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OPEN INTEREST: 426,300
COMMITMENTS
200,43650,34024,184139,479327,143364,099401,66762,20124,633
CHANGES FROM 12/18/12 (CHANGE IN OPEN INTEREST: -9,442)
-2,2055,480-2,2781,699-12,771-2,784-9,569-6,658127
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS
47.011.85.732.776.785.494.214.65.8
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 331)
18370715248271162Row 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.