Last week December 2012 Gold opened the week at $1,673.20 per ounce and closed the week at $1,687.60. On Friday we saw a nice range in gold, with it hitting its weekly high on Friday at $1,695.50 and its weekly low on Friday at 1647.10. The H/L value for the week was $4,840.
On the daily chart you can see the Modified ADX is now at 39.70 reflecting a strong trending market. MACD is bullish adding divergence up away from the signal line and moving further away from the zero on the histogram. Stochastics are overbought, but I am not concerned about that with Modified ADX numbers near 40. Of course many are now saying Bernanke’s comments on Friday will help Gold retest $2,000.
Gold prices will not rise unless we see an increase in buying and selling. And guess what?
Proceed to Page 2 for the latest COT Data...
Take a good look at the weekly chart, especially the COT Disaggregated Report. Two weeks ago on Aug. 17 Swap Dealers were net short gold -11,572 contracts, on Aug. 24 they were net short -27,990 contracts, and this past Friday, Aug. 31 Swap Dealers were net short -43,255 contracts. The last time Swap Dealers were net short more than 40,000 contracts was the last week of February 2012, at that time gold was trading between $1,750 and $1,800 per ounce. Swap Dealers were not the only ones increasing net positions. Producers are now net short -160,369 contracts and Managed Money is net long 113,166 contracts. As these net positions rise, so will the price of gold. Is this the start of something big? Could be, if “big money” has something to say about it, and it looks like they said something this past week. I hope you heard it.
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...
Have a prosperous trading week.
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