1000k again!!, page-24

Gold price consolidation article by Troy Schwensen.

loki



http://www.financialsense.com/fsu/editorials/schwensen/2009/1001.html


"•2003: 26 Aug 03 – 59% net short (% of COI)
•2004: 26 Oct 04 – 58% net short (% of COI)
•2005: 20 Sep 05 – 62% net short (% of COI)
•2007: 25 Sep 07 – 54% net short (% of COI)
•2009: 15 Sep 09 – 63% net short (% of COI)
Each new run in the gold price has always started with a commercial net short (% of COI) position of close to 55% or above. To see a graphical representation, look at the chart below. The middle section of the chart shows the commercial net short position as a % of the COI, the top section shows the gold price and the bottom section the commercial open interest (COI). Notice how these net short positions remain in the 50 – 65% range for the duration of each run up in the gold price (red circled areas). We have seen this time and time again. There is no question the risk of a shake out in the gold price is highest when these commercial net short positions are at these level. As you can see however, this characteristic also corresponds with the most significant moves higher in the gold price. "