Gold News

Gold Erases Last of 2013 Price Crash with Comex Speculators 5x More Bullish

GOLD PRICES gave back an earlier rally in London trading on Monday, falling back to $1548 per ounce as world stock markets tried to extend last week's run of new all-time highs.
 
At Friday's close in New York, the MSCI All-Countries index set its 13th new all-time record high of the last 22 trading days.
 
Gold prices meantime ended Friday for their fifth weekly gain in a row, the longest stretch since June, fixing at regulated benchmark the LBMA Gold Price's 3pm session at $1553.60 per ounce.
 
That saw gold set its highest weekly close at the London afternoon benchmarking since 5 April 2013 – eve of bullion's steepest-ever price crash, wiping over $1 trillion off the value of all the precious metal above-ground.
 
Back then, just before the 2013 gold crash, speculative traders betting on bullion prices through Comex futures and options held a net bullish position less than one-fifth the current size.
 
Chart of Managed Money's net spec long in Comex gold futures and options. Source: BullionVault
 
In the week-ending last Tuesday, just before gold prices spiked to $1611 on news of Iran retaliating with rockets against US targets in Iraq for killing a senior military commander by drone, the so-called 'Managed Money' category of derivatives players grew its bullish betting on gold prices for the 4th week running, according to data compiled and published by US regulator the CFTC.
 
Allowing for the same group's bearish bets, that put their net speculative long position at the second largest ever, just behind September's all-time high.
 
Silver prices today followed gold prices lower to trade back beneath $18 per ounce, while platinum lost $10 to $970.
 
Commodity prices slipped 0.3% overall as crude oil retreated, despite members of the Opec oil producers' cartel making deeper output cuts than officially announced overall according to news and data agency S&P Global Platts, led by No.1 Saudi Arabia compensating for 'cheating' by Iraq and Nigeria.
 
"The US still needs Middle East oil for stability and the spare capacity of Opec member countries," reckons industry analysts speaking at the Atlantic Council's Global Energy Forum yesterday, disputing President Trump's claim when vowing last week to destroy Iran if it attacks the US that the United States has achieved energy independence.
 
" He's incorrect," adds economist Edward Hirs at the University of Houston.
 
"We consume roughly 20 million barrels of crude oil each day. We only produce about 12.5 million barrels of crude oil each day."
 
Leaders of the 2 warring factions in Libya – the Opec cartel member where daily crude output remains one-third below its pre-2011 levels under dictator Muammar Gaddafi – today met for peace talks in Moscow, with a Russia-Turkey brokered ceasefire already in place.
 
Tuesday meantime brings the first end-2019 earnings reports from US corporations, with analysts forecasting a 2% decline overall from a year earlier – a "pretty low bar" according to one investment strategist.
 
"The confidence that investors have in the re-acceleration of the economy and profits hasn't been shaken, and you need that to justify prices where they are and to continue to see positive performance in 2020," the Wall Street Journal quotes Thomas Hainlin at US Bancorp's Ascent Private Capital Management division.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

Market Fundamentals