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[Rock]

No doubt some traders are a bit spooked by the most recent COT (Commitment of Traders Report), which shows gold Commercials net short 144,000 contracts. Generally speaking, if one traded solely on COT report info, this would be the time to sell. The number of shorts here is well above the average for the past 12 months. However, when we look back to Oct 5, 2004, for a comparison, we find that on this date the commercials were also short a large number of contracts, 154,000 to be exact. We note that gold was trading at 420 just then, and anyone who used COT data to sell gold the next trading day, missed out on a nice 2 month rally which took gold from 420 in October 2004 , to 455 in December. Meanwhile the HUI Index of unhedged gold mining stocks rose from 230 to 245. The conclusion we draw from this is that the commercial traders, although a dominant force, are not perfect, and COT figures should be considered as part of the decision making process, AND NOT THE SOLE COMPONENT.

[calmcookie]

Thanks for your post. My two miners did not close down as hard as expected. Interesting to see how this plays out. Either way, alive I'll stay. Best, C.C.

Edited by calmcookie, 28 June 2005 - 04:41 PM.