Related: Don’t Ignore Gold ETFs for a Diversified Investment Portfolio
Short covering has the potential to be a major catalyst for gold and the miners.
“For the week ending September 25, money managers increased their speculative gross long positions in Comex gold futures by 609 contracts to 98,513, while short positions increased by 1,823 contracts to 182,190. This means that gold’s net short position is 83,677 contracts,” according to Miller. “The gold market could be poised for a short-covering rally, as investors are likely to start closing out their record level of short positions, given gold’s resilience to not break below key levels of support.”
Data indicate traders have been adding money to the bullish JNUG and NUGT over the past month, but the bearish equivalents are drawing larger inflows.
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