This is the kind of gold futures CoT report that gold bulls definitely did not want to see:
A sizable increase in net speculative long positioning combined with a 15,260 contract increase in open interest which appears to have primarily come as a result of both large & small speculators opening fresh long positions. All of this took place against a backdrop of gold failing to hold above the $1200 level and quickly falling back below $1180 on the date of the report (June 23rd, 2015).
The concerns are now as follows:
- The market appears to be much too long given the gold market’s poor technical structure and poor performance
- If the support near $1167 breaks and the descending triangle breakdown projects a move down to the $1130-$1140 area – below $1130 we could quickly see a move to the $1050s
While seasonality turns bullish beginning next week we will have to take it with a grain of salt unless we see some signs of capitulation among futures speculators or a significant improvement in the market’s technical structure.