Gold and Silver Prices Finding a Bottom? Based on CoT Positions I Think So - July 2017

Click on Chart to Enlarge

The chart here is a chart of gold prices and the Commitment of Traders data for the last couple years.  This is produced on Barchart.com

What is notable here is that the red line, which is the "smart money" commerical traders, is showing the highest reading going back until the bottom of the bear market in late 2015.  Basically with prices where they currently are, these producers are not seeing the necessity of hedging much.

Also, it is rare for the red line to ever cross above 0 as it did at the bottom of the last bear market.  Basically the commercials are totally unhedged and are in a small speculative long position when that occurs.

The other side of the commercial position is the large speculators.  And you can see they have the lowest net long position since the bottom of the bear market.

I am making note of this here, because it seems very possible that these levels are significant enough to form a corrective bottom in gold and lead to a significant advance.

If prices are able to break below this month's low, I would expect that commercials would continue to support prices and the chop may continue.