The past week we saw August 2012 Gold open at $1,561.80 per oz. and close at $1,604.20.
During the month of June we saw August Gold hit a high of $1,642.40 on June 6 and a low of $1,545.50 on June 1. What you should know is fundamental shocks moved gold more than anything else during the month of June’s price action. Taking a look at the first trading day of June the first, we saw gold open at $1,561.80 and close the day at $1,622.10, a $60.30 move up caused by a dismal U.S. jobs report. Buy June 8 we saw gold hit a low of $1,556.40 on a day with a long legged doji candlestick. On June 21 gold dropped $42.20 on banks getting downgraded and the EU debt crisis worsening. Then the last trading day of June, gold opened at $1,551.30 and closed at $1,604.20, a $52.90 move up. What caused this? A report coming out to the two day EU summit that Euro area leaders came to an agreement to solve the debt crisis. Will this agreement work? Hopefully better than the agreements made the past two years. Stay tuned.
Proceed to Page 2 for the latest COT Data...
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.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.
Proceed to Page 3 for this week's detailed fundementals...
Technically on the daily chart we see gold in a weak trend and is in a range, even with Friday’s $50 move up. ADX is at 17.5 and DI+ and DI- are both dropping below 20. MACD has dropped divergence from below the signal line and is looking to cross up over the signal line on Friday’s ride up. Also from Friday’s price action Stochastics corrected from oversold territory
So how is “big money” moving around in gold futures? Looking at the disaggregated COT report on the weekly chart we see producers dropping net shorts from -152,466 contracts to -143,872 contracts. Our friends the swap dealers went from net shorts of -11,225 contracts to net short -288 contracts. Managed money dropped net longs from 93,151 contracts to 77,495 contracts, helping keep gold in its current range. You can see very clearly that when swap dealers start adding large numbers to net shorts gold will rise to new heights. Just look how swap dealers helped producers short gold starting in the fall of 2009 helping drive gold up from $900 all the way to $1,900. I highly recommend watching this very closely to catch when gold starts its next longer term move up.
What I do not understand is why gold is up on “good” news from Europe, and the same affect on “bad news” from the United States. Stay cool and have a prosperous trading week. And remember, trade what you see, not what you feel.
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