Anthony Davian submits:

by Philip Dunham

Gold

Open interest continued to expand, this week by 36,290 contracts. Producers/consumers increased long positions by 4,650, short positions by 1,275. Managed money reduced long positions by 1,676 and increased shorts by a minimal 407. Non reportable traders increased long positions by 3,775, shorts by a sizeable 9,015. While gold charts look parabolic, positioning is not indicative of rampantly bullish sentiment. Regardless, at these levels, picking a direction is a short term/day trading game. Given willingness of non reportable traders to short into this move, a blow off move that shakes out shorts would not be surprising. Interestingly, the futures-spot basis (front month futures price minus spot price) is negative rather than the typical premium over spot. This is a bit unusual, as the mean over the past year is 1.6 and generally does not stay negative for very long.

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