February 2012 gold closed Friday, Jan. 13 at $1,630.80 and this past Friday, Jan. 20 gold closed at $1,664.
On the daily chart you see ADX now at 29.8, which shows developing strength to trend. DI+ crossed up over DI- Jan. 5 along with MACD crossing up over the signal line the same day. MACD shows solid divergence reflecting momentum to the price action and looks to crossing up over the zero on the histogram today. Stochastics starting correcting from oversold territory Jan. 3 and 4 and are now in deep overbought territory. As long as ADX numbers rise, I am not concerned with this.
Proceed to Page 2 for the latest COT Data...
COT Data
If you really want to know when gold makes its move to $2,000 and beyond, you must read the new COT Disaggregated report on the weekly chart below. When looking at the COT report in commodities, the new report is far superior to the older legacy report. Look between July 2011 and October 2011. See how Swap Dealers and Managed Money liquidated net-shorts and net-longs? And then look at the Producers, interesting yes? When you see a posture change for Swap Dealers (adding to net-shorts) and Managed Money (adding to net-longs) you will know gold is on the move up with “big money” moving it. A move, no doubt, that will bring gold to $2,000 and beyond. Without big money making this change I highly doubt gold will get to $2,000. It really is that simple.
And what have I always said. It is not real demand (jewelry-industrial) for gold that has gold so high today. It is investment demand. See the increase in ETF gold demand below in fundamentals. If anyone out there thinks gold ETF’s have nothing to do with the price of gold, I would love to hear from you. I would love to be proven wrong.
|
Commodity |
12-mo low |
12-mo hi |
20-Jan |
13-Jan |
|
Cattle (feed) |
-1,290 |
5,543 |
-374 |
482 |
|
Cattle (live) |
-40,877 |
10,437 |
-10,977 |
-13,384 |
|
Hogs |
-46,574 |
21,270 |
-9,044 |
-7,541 |
|
Corn |
-413,915 |
-36,487 |
-94,152 |
-113,770 |
|
Oats |
-7,738 |
176 |
176 |
-58 |
|
Soybeans |
-202,008 |
28,178 |
-10,788 |
-20,068 |
|
Soybean meal |
-84,656 |
32,081 |
15,865 |
7,650 |
|
Soybean oil |
-117,444 |
29,745 |
17,836 |
-5,764 |
|
Wheat |
-32,577 |
87,922 |
87,922 |
75,002 |
|
Orange juice |
-22,341 |
-9,769 |
-14,220 |
-16,279 |
|
Coffee |
-44,923 |
1,153 |
-8,958 |
-3,540 |
|
Cocoa |
-41,808 |
10,252 |
8,597 |
8,714 |
|
Sugar |
-221,694 |
-25,626 |
-39,124 |
-31,975 |
|
Cotton |
-46,785 |
-2,152 |
-19,681 |
-19,085 |
|
British pound |
-66,435 |
88,682 |
65,645 |
55,613 |
|
Canada dollar |
-115,190 |
25,942 |
23,119 |
19,007 |
|
Euro FX |
-124,855 |
187,185 |
187,185 |
181,662 |
|
Japanese yen |
-64,864 |
76,983 |
-59,885 |
-56,728 |
|
Swiss franc |
-42,387 |
26,491 |
24,832 |
26,491 |
|
US dollar index |
-53,158 |
14,003 |
-52,051 |
-52,962 |
|
Mexican Peso |
-140,414 |
39,901 |
19,168 |
24,549 |
|
Australian dollar |
-110,025 |
479 |
-64,096 |
-60,123 |
|
S&P 500 |
-77,473 |
73,398 |
-14,599 |
-11,225 |
|
T-note -10 yr |
-49,750 |
229,611 |
-49,750 |
15,661 |
|
T-bond -30 yr |
-20,389 |
88,803 |
-7,958 |
19,453 |
|
Eurodollar |
-408,407 |
1,126,194 |
134,749 |
590,076 |
|
Crude oil |
-319,669 |
-114,385 |
-203,116 |
-195,395 |
|
Heating oil |
-61,838 |
-4,204 |
-42,182 |
-39,501 |
|
RBOB Gasoline |
-84,937 |
-38,417 |
-82,453 |
-79,799 |
|
Natural gas |
108,160 |
228,910 |
129,484 |
133,704 |
|
Copper |
-35,687 |
14,419 |
2,132 |
6,835 |
|
Gold |
-287,634 |
-159,153 |
-172,976 |
-166,574 |
|
Platinum |
-35,249 |
-18,670 |
-23,527 |
-22,486 |
|
Silver |
-57,793 |
-14,132 |
-20,382 |
-19,062 |
Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.
Proceed to Page 3 for this week's detailed fundementals charts...
Fundamentals
Gold prices rose to a five-week high. Bullish factors include:
- Demand for gold as an alternative asset after S&P downgraded the credit ratings of nine Eurozone countries.
- Demand for gold as an inflation hedge after the ECB lent European banks a record €489 billion for three-years, the PBOC cut banks’ reserve requirements for the first time in three years and the Fed and five other central banks cut the cost of emergency dollar funding for European banks.
- The Fed’s pledge to keep interest rates “exceptionally low” through at least 2013 with the possibility of “QE3.”
Bearish factors include:
- Dollar strength that fueled long liquidations after gold holdings in ETP’s rose to a record 2,360.8 tons last month.
- Reduced inflation concerns after December Eurozone CPI fell to a +2.7% y/y increase from a three-year high of +3.0% y/y in November.
Fundamental outlook — Short-term bullish — Gold prices rallied further to a five-week high on increased safe-haven demand from the European debt crisis. Gold continues to see downward pressure from the recent dollar strength, but the long-term trend remains bullish because of the European debt crisis, uncertainty about the Chinese economy, and extraordinarily easy G7 monetary policies.
Supply/demand summary
Gold Council — Q3 gold demand rose +6% y/y to 1,053.9 MT as retail investment demand jumped +33% y/y (i.e. gold coins) and gold ETF demand surged +58% y/y. Q3 jewelry consumption fell -10% y/y and Q3 technology demand was unchanged. Q3 gold supply rose +2% y/y to 1,034 tones and Q3 mine production rose +5% y/y to 746 tones.
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