ROSS NORMAN : Gold and the Dog Days of Summer
There is a rather tasteless joke that asks where you will find a dog without any legs ? ... Precisely where you left it. I am just back from holidays and that my friends has been how the gold market looks, precisely as it was... except.
The chart below has been borrowed from John Reade's twitter page and for the first time in 2018 gives me a really warm feeling towards gold prices.
It shows that the specs on COMEX have finally surrendered their long position and the market is now at last clear for a rally. Yes, the US dollar has provided headwinds this year, but it has been that overhang of stale spec longs that for me has weighed on sentiment in the market.
The reduction in net longs has been the equivalent sale of 700 tonnes of gold that the market has absorbed during 2018 (down from about 712 tonnes to just 12 tonnes net long).
With the market in the dog days of mid-Summer doldrums it probably seems unlikely ... but better a little early than a little late. This old dog might surprise us all yet.
Sharps Pixley, London
03 Jul 2018