Monday, July 27, 2015
Though gold has not yet mounted any sort of relief rally, there are some encouraging signs we are getting quite near a bottom.
First and foremost, gold futures speculators are net negative for the first time ever:
The disaggregated Commitment of Traders Report (COTR) show, for the week ending July 21, money-managed speculative gross long positions of Comex gold futures fell by 2,116 contracts to 106,297. At the same time, short-sellers added to their positions by 10,317 contracts to 119,853. The gold market is now net short 13,556 contracts, the biggest short position since the series began in 2006.
Second, gold is being pronounced dead, not just at Bloomberg, Market Watch, Forbes, Business Insider, CNBC, The Economist, Kitco and the Wall Street Journal, but most investment houses like Goldman Sachs, Credit Suisse, Soc Gen, ABN Ambro, S and C, UBS, Deutsch Bank and Morgan Stanley as well as many analysts with large followings like Harry Dent, Dennis Gartman, La Forge, and Martin Armstrong are all urging their clients to SELL gold here at $1100 dollars to avoid the inevitable fall to $600.
Perhaps they'll all be right. But nobody of any note is calling for a bottom here - or near here. When everyone is positive gold has much farther to drop - it's a good bet that everyone can't be right.
The big argument now for the continued fall is that there are still some troglodytes clinging to their gold in their caves. But after World War II, there were some Japs in the trees clinging to their rifles and that didn't keep the war from ending.
Third, ebay has become a fire sale for semi-rare coins with "Low mintage dates." Coins like the 1995 100 yuan Panda that couldn't be had at any price because of hoarding a few short years ago are being peddled on masse (3-4 ready examples on any given day).
And last, but not least, the global debt situation is deteriorating at an ever accelerating rate. The narrative is that debt is now suddenly under control.but global debt has grown by 57 Trillion since the last crash in 2008 - and global debt to GDP has grown by 17 percent. How long before the next crash?