John Reade Profile picture
Aug 20, 2018 7 tweets 4 min read Twitter logo Read on Twitter
Gold: Sitting like a Coiled Spring, #gold remains below $1200/oz on Monday, although it has recovered a little ground from the lows last week. 1/7
Gold: Why did I use the ‘Coiled Spring’ analogy? Because of build-up of Managed Money short #gold positions held on the Comex Futures market. Gross Managed Money short positions increased by a further 1.7 million ounces last week and now stand at a new record 18.8moz. 2/7
Gold: This has driven the net Managed Money #gold position to a larger net short position. 3/7
Gold: And the ‘legacy’ net speculative #gold position is now net short for the first time since 2001. 4/7
Gold: Some people have correctly pointed out that this is not unique. In the late 1990s, speculators were regularly net short #gold. But US interest rates were materially higher then, with 3m LIBOR around 6% through that period, a far cry from 2.3% today. 5/7
Gold: Gold: Also, central banks were large net sellers of #gold in the late 1990s, while producers enthusiastically also added to their hedgebooks during that period: neither of which is the case at the moment. 6/7
Gold: Of course, gold could trade lower if the US dollar resumes its strength, but in light of positioning; with decent volumes seen in Shanghai of late; and gold in India moving back towards a premium, the risks to me seem skewed towards a sharp recovery at some point. 7/7

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More from @JReade_WGC

Sep 18, 2018
Gold: The COTR for #gold was released Friday, as usual, but I was away from the office yesterday and didn't get a chance to update spreadsheets: I need not have worried as its almost unchanged.

Managed Money remains net short gold, reduced by 0.75moz to 7.1 moz

Gold: Gross #gold longs were down 0.16moz to 10.4moz, continuing to bounce roughly around the base level seen over the past six or seven years

Gold: While Gross #gold shorts fell by 0.91moz to 17.5 million ounces, just shy of the highs seen since this data was available (2006).

Read 5 tweets
Sep 14, 2018
Gold: Tomorrow marks the 10-year anniversary of the failure of Lehman Brothers and, consequently, economists, market commentators and journalists have been rolling out their thoughts on both the financial crisis and the subsequent decade.

Gold: How did #gold fare through the crisis? This chart, from July 2008 to July 2009, shows no sign of gold moving rapidly higher? In fact, gold fell in the fourth quarter of 2008 as the dollar strengthened and gold was used as a source of liquidity (and sold.)

Gold: Although in the first half of 2009 #gold was comfortably above the level it was when Lehman failed…

Read 16 tweets
Sep 10, 2018
Gold: Stubbornly Short:

CFTC data, released Friday for positions as of Tuesday 4 September, show that Comex Managed Money remains short #gold.

Gold: There was little change to the already-elevated gross Managed Money short #gold position, which increased by only 100Koz; gross longs fell by 900koz to 10.5 million ounces, driving the net short position 1moz higher to 7.9Moz

Gold: There has been little change in price or Comex #gold open interest since last Tuesday, indicating little change in positions since then and no obvious technical trigger for a further move.

Read 7 tweets
Sep 3, 2018
Gold: Its likely to be quiet today, with the US markets closed for the Labor Day public holiday. But the CFTC released its Commitment of Traders Report on Friday, as usual. To summarise, speculators were still (just) net short #gold as of 28 August. 1/6
Gold: The Managed Money category also remains net short #gold, although as in the case of the legacy report net speculative position, the net Managed Money short decreased slightly last week. 2/6
Gold: There was not much change to the Managed Money gross long #gold positions, which were steady around 11.4 million ounces. 3/6
Read 6 tweets
Aug 28, 2018
Gold: Early this year I noted the divergence between #gold and real US yields and wondered why this should be. 1/6
Gold: I noted that #gold's negative relationship with the dollar had become very important. 2/6
Gold I also suspected rising inflation expectations might be changing the drivers in #gold. 3/6
Read 7 tweets
Aug 22, 2018
Gold: Mukesh Kumar, manager of research for @GOLDCOUNCIL in India, has spent the past few days talking to contacts across the Indian #gold market. The first thing I would observe is that the NCDEX polled premium is now positive (data to 20 August) 1/6
Gold: Mukesh notes that there will be an impact from the recent devastating Kerala floods and that the Onam festival will see less #gold demand than normal. But almost all the contacts believe the impact of the flooding will be temporary and should be limited to Q3-18. 2/6
Gold: For country as a while, almost all elements of the trade (fabricators, retails, dealers, banks and industry associations) are positive about #gold demand in H2-18. 3/6
Read 7 tweets

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