COT is out. Managed Money (hedge funds &CTAs) cut their net long gold futures position in 1/2 to just 34K contracts, primarily on huge 44% jump in short contracts (attempt to smash gold lower with Chinese absent for New Year holiday week). Didn't work. Gold down only 0.5% ($11) In addition to Chinese New Year, gold Managed Money shorts also had tailwinds of very hot CPI, hot PPI, rising yields (10-yr. to highest level since Nov.), & stronger $. Still could barely dent gold. Silver UP 3.5% on week even as they took short contracts up 14.4% (net short 9k)

Gold's price eventually goes up in US$ terms, as it has since Fed was created 100+ yrs ago. Currently, gold in US$ terms is in a consolidation period(in yen, yuan& other currencies it's recently hit records) mostly because of massive Western dumping of holdings & shorting futures

https://twitter.com/LeonBrnstein/status/1712565439707193770

While I find this selling to be shortsighted & lacking "common sense," I see no "cap" on gold's price. Over past several yrs., each time futures traders' selling became exhausted (usually they're net short), rallies have occurred & have started from a higher low.

There's not a lack of retail interest in gold in the US. Retail is relatively strong (thus Costco selling gold bars). It's the INSTITUTIONS dumping gold. GLD holdings are down to 4+ yr. low (Aug 2019 level). They've dumped 409 tons (1/3rd of their GLD holdings) over past 3 yrs.

https://twitter.com/KrishanGopaul/status/1709864975861174333

What are the "professionals" doing as they dump gold at a time when we have a completely dysfunctional government, out of control debt&deficits &concerns about funding? Exactly what they did in '99-2000, pouring money into a concentrated number of grossly overvalued tech stocks

Very impressive flat-to-slightly up gold performance today (miners +1%) given 10-yr. bond yield ripping higher to 4.16% & computer algos obviously selling gold futures hard this morning (as they have all week) following the usual gold bounces in Asia. reuters.com/article/asia-g… As the Reuters story notes, there's "robust demand" from China (gold premiums near 5-month highs) & seasonal demand from Indian jewelers picking up -on schedule. These physical buyers are helping to offset the heavily levered gold paper futures selling in NY & London (cptr algos)

"Investors" rationalizing paying ridiculous prices for tech stocks -even with virtually all key end mkts. plunging. Semiconductor Industry Association(SIA) reported March industry sales down 21% Y/Y(worst drop since 2009 recession). Meanwhile, SOX index is up 26.5% Y/Y. Why? "AI" Yet, "AI" is nothing new. AI term coined in mid 1950s. NVDA working on AI since early 2000s. NVDA's CUDA in 2006. IBM's Watson (2011) was going to revolutionize world. "Watson is a question-answering computer system capable of answering questions posed in natural language."

Finally, some "expedited" COT data (thru 2/14). Managed Money(hedge funds &CTAs) dumped 18.4K gold futures contracts (half decreased longs &half increased shorts). Combined with last Friday's data (thru 2/7) total dump is 43.3K, bringing their net longs down to just 41.1K, (-51%) However, there's more backlogged COT data to come & over next 10 days (thru 2/24) gold fell another $45. Using latest week's run-rate, when gold fell less than $20 on 18.4K contracts dumped, it could bring Managed Money's net long gold futures close to zero& that's VERY positive

What's going on at Apple's primary iPhone factory is an epic disaster & it's happening during the critical holiday season build. Apple analysts, of course, are either asleep at the wheel or blatantly ignoring this(because AAPL is in EVERYONE's portfolio?) scmp.com/tech/article/3… As it was, this factory was short 100,000 workers (out of 300K) &now they're paying some workers to leave - in order to try to stop the internal protests among the rest. This factory accounts for almost all of AAPL's high-end (high-margin) iPhone 14 models - & are now in shortage

Here we go: Just 3 weeks after announcing iPhone 14 models (Sept 7). Apple is already cutting orders to its suppliers due to weak demand. Gotta be the fastest downturn from its annual hyped-up smartphone shindig I've ever seen, though it's no surprise here finance.yahoo.com/news/apple-dit… Timing of this report is catching investors off guard as investors were told by nearly everyone that Apple is a "safe haven" - from Gene Munster (just yesterday), the long-time "axe" on AAPL's stock, to CNBC's Cramer. WSJ also ran upbeat story yesterday cnbc.com/2022/09/27/app…

"Benchmark (gold) prices in Shanghai have climbed to a premium of more than $43 an ounce over their London equivalent, the highest since 2019" COT report showed another big jump in Managed Money (hedge funds & CFTs) net short futures to -36.7K contracts economictimes.indiatimes.com/markets/commod… The Managed Money (MM) net short position is also the highest since the (record high) in 2018-2019 from whence gold soared from around $1180 to 2060 over the next 2 yrs. Once again, almost all (over 90%) of last wks. (thru Tues) drop in futures contracts was from increased shorts

Today's gold slam (Tues. too) was all about levered traders dumping paper derivatives (200K futures contracts sold in very brief period today) in order to break chart level & stampede gold owners into selling. PRIOR to today's slam, physical gold price premiums in Shanghai +$40

https://twitter.com/mercerron/status/1570472876490518529

Managed Money(hedge funds & CFTs) already in rare net short position(COT) before these two attacks. Certainly even deeper today. Justification (such as it is) is "hawkish" Fed including many who believe Fed's in control & will be able to hike aggressively without breaking economy

If oil prices keep rising (as they have for a week+), stock bulls' dreams of transitory inflation (leading to lower Fed rates) will be over (given higher oil & gas prices, electricity, wages, rents etc.) & stock mkt will have another Sept/Oct hissy fit. finance.yahoo.com/news/oil-holds… Was looking back at 2000-2002 bear market (following the tech bubble, which was smaller than today's "everything bubble") & noticed while there were several significant bear mkt rallies, September into October periods were bloodbaths - all three years - in 2000, 2001 & 2002

3.2 tons GLD inflow on Friday. Nothing but outflows over past 2 months (except for 1 small 1/2 ton day). First sign of the return of investment interest in gold? It's typical for investment demand to lag following gold bottoms. Most recent bottom occurred July 21 around $1680 Since that 7/21/22 gold bottom, 20 tons flowed out of GLD. Prior major bottom in late March 2021 (around $1670) also saw GLD outflows until May 3 (over 1 mo.) Once the inflows started that May, gold powered higher to $1900 by end of month. Similarly happened at 8/16/2018 bottom.

Gold up &miners pummeled(again). Good time for reminder they have different sets of buyers. Physical gold primarily purchased by int'l buyers(1/2 China &India alone), while miners purchased mostly by N. American investors (US&Canada). Not unusual to see divergence at gold bottoms 2 major gold bottoms: Dec. 2015 & Aug. 2018 both saw gold turn up first & miners bottom later. Gold bottomed at $1050 in mid-Dec 2015, but GDX didn't hit low until over 1 mo. later. Gold low mid-Aug '18, but GDX didn't hit its low until 3 weeks later. N.Americans - slow learners?

Nvidia -$5 mostly due to huge revenue guide down from Corsair Gaming, #1 provider of high-performance gaming gear in US ($2B sales annually). Took rev. estimate to $284M vs forecasts $350M. "macroeconomic headwinds affecting consumer spending on gaming gear, especially in Europe" Corsair: "This (macroeconomic slowdown) has caused a buildup of inventory both in our warehouses as well as in the retail channel, thus causing our channel partners to delay ordering while they clear this excess." Corsair provides prebuilt and custom-built gaming PCs & components

Headline form Reuters today: "Strong dollar pushes gold to fifth weekly loss." However, the US $ fell sharply today and gold still declined. Because it's not the right headline. Should read: Managed Money speculators push gold to fifth weekly loss." reuters.com/article/idUSKB… Gold's decline over last several wks is mostly due to these speculating/manipulating futures traders pushing the trend (currently down) in their attempt to break gold chart technical levels and demoralize/stampede gold holders. The narrative: ($ correlation) is the flavor of day.

For those of you wondering why the Nasdaq gave up its early gains so quickly this AM and is now down, it's likely due to a Cramer interview last night with cloud provider Service Now CEO Bill McDermott (usually an uber-bull). Cramer lobbed his typical softball questions to elicit the expected answers (and got them) until McDemott added a "but." The NOW CEO then cited a litany of woes (40-yr high in inflation, $ highest in 2 decades, rising interest rates, worries over security, war in Europe - "So the mood is not great." Also companies need to see

Today's COT report (as of Tues.) saw Managed Money (mostly hedge funds) net long gold futures position plummet to just 17k contacts, down 52% on week to lowest level since Spring of 2019. In May 2019, gold began a massive 60%,14 mo. run to record highs (from $1270 to $2050+) Over that same 14 mo. period (late-May 2019 to early Aug 2020), the miners soared over 130% (both GDX & GDXJ ETFs). GDX jumped to nearly 66 (31 currently) & GDXJ to almost 46 (27 now).

It's ironic I'm responding to "excess liquidity." Mkts won't break "catastrophically." Every time we near a "crisis," CB's "pivot" & create more money. Fed inflated the U.S. money supply a Weimar-like 40% in just 2 yrs in response to COVID. They have intervened so many times....

https://twitter.com/excessliquidity/status/1544673238390816772

they've destroyed the proper functioning of markets, making them "batshit crazy" as Paul Tudor Jones described. As in Weimar and in other highly inflationary periods, everyone (most investors) become speculators. In these types of markets, oil can go negative, as can bond yields

Over past 5 weeks, gold has held firm in trading range (1800-1860, currently 1834). Miners much weaker. 2 different sets of buyers. Int'l buyers(China, India etc) are primary gold buyers but miners primarily driven by N. America. Gold Miners Bullish % Index fell again today to 24 The relatively low Gold Miners Bullish Percent Index (BPGDM) at 24% is at a level where miners over past several yrs. have ALWAYS rallied & in most cases, rallied sharply. Futures traders (per COT & also mostly Western buyers) also have relatively very low positioning. Rally soon

Lots of progress in today's gold COT report. Managed Money (hedge funds) net long futures position drops another 20% (thru Tues) down 13.3K contracts to just 67K. Longs down, shorts up. Approaching lows for the year - when gold was under $1,800 - just before gold ripped to $2050+ I watch Managed Money very closely because hedge funds are notoriously most long gold futures contracts at tops and have their smallest net long positions (and very rare net shorts) at bottoms. Even better indicators than Commercials ("smart money") who do the opposite.

$80 gold correction & selloff in miners in just a week has been steep, though not really that surprising. Sentiment was overly bullish. Wells Fargo, BofA with predictions of record high gold prices, Barrons with a $3K gold story. This will wash out the hot money that had come in For those of us with cash - newsletter readers know I'd built up my portfolio's biggest cash position ever anticipating gold's seasonal weakness, selloff will offer opportunity to buy back at lower prices. Of course, wish I'd trimmed even more, but in long-run selloff is helpful