No report this week from Commerz so i’ve posted up GS’s latest take on the bullion.
In summary, they are long and medium term bearish on the asset class. They sight rising interest rates, low inflation and an improving US fiscal picture to cap any short term bounces in the bullion. Near term they are more bullish but only a bounce. They have, apparently, closed their proprietary short positions though why they would flag so clearly their own positions is for anyone to guess. (GS derives the bulk of her profits from prop trading).
Here their take on the bullion market:
And to counter weight this generally bearish take on the bullion here Hinde Capital’s most recent report.
And here the Open interest issue which i’ve picked up on in the forum area. Its one thing to short sell an instrument. Its quite another to book the profit successfully. Open interest (as of last Tuesday) remains at an extremely elevated level and it is predominately a short position. More sellers need to be found and given the comex and world wide lack of physical supplies, quickly.
The combined options and futures OI is at extremes whilst the long position is at extreme lows. This is usually bullish. Note the non commercial long position remains extremely depressed in the paper markets. When sentiment is at its weakest (especially in the non commercials) is usually an indication of an immediate price reversal. In this market however it is systemically useful to the commercials to keep prices low so the bounce may be more shallow than in other commodity markets due to this issue.
Here the legendy Jim Sinclair on the Comex physical issues:
And here Capsyn’s prior coverage of the story of the Hunt Brothers.
http://www.capitalsynthesis.tech/the-hunt-brothers-remembered-regulatory-lessons/
Onwards we march
Rich
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