Quite contrary, apart from the usual activity visible in COT reports (the charts below), the investors, horrified by the British Brexit, loaded up large quantities of gold:
source:GLD
The chart above shows gold in / out flows, reported by GLD. Last Friday (the day after the Brexit vote; I remind the heavy sleepers - the British voted to leave the European Union) GLD reported one of its highest gold inflows - as many as 18.4 tonnes of gold (592 thousand troy ounces) went into GLD vaults.
As a matter of fact, there were only four cases when GLD reported higher inflows during the current bull market in gold:
- December 18,2016: an inflow of 603 thousand ounces
- February 19, 2016: 622 thousand
- February 22, 2016: 622 thousand, once again
- May 2, 2016: 669 thousand
Finally, to make my readers informed - below you will find the updated charts showing net positions held by speculators in gold / silver futures:
source: COT Report
source: COT Report
Thanks SD for all your articles. There are other bloggers calling the COT reports excessive. At what level do you think it is showing too much bullishness? You have been spot on BTG is it too late to get in?
ReplyDeleteAs for BTG. I believe that in the long-term these shares should be stronger than the broad precious metals market. Further, I do not think that the bull market in gold is going to end tomorrow. So, generally, it is still the right time to buy BTG.
DeleteFinally - as usually, a set of old questions:
- when to buy
- maybe tomorroow
- maybe the day after tomorrow
- how many stocks to buy
etc etc. all depends on individual psyche....
Hi Harry,
ReplyDeleteI do not know when there is too much optimism. Each phase of a bull market (and a bear market as well) has its dynamics. And this dynamics is changing together with markets. Sometimes a net long position of 200 thousand contracts is excessive, then even 250 thousand is not. That is why it is so hard to call a bottom or a top.
For me, the COT report is about increasing or vanishing optimism / pessimism. I was writing about it many times (for example, this link could be of some help (look up at the summary):
http://seekingalpha.com/article/3973167-gold-market-play-like-jesse-livermore
Shortly speaking - when the price of gold is going up and speculators hold smaller net long positions it may be an indication of an incoming correction or even the end of a bull run.