Two weeks ago we noted something that has never happened before in gold – hedge funds, according to CFTC, had a net short position for the first in history.The past week saw a very surprising negligible shift of just 11 contracts as the short position shrank to 11,334 contracts. However, the aggregate net long position has dropped to a level that in the past has represented a threshold for signficant short-covering (21% and 17% rallies respectively). So with hedgies as short as they have ever been in history and aggregate positioning at a historically crucial level, one wonders if gold is due for a bounce…
Hedgies remain the most short they have ever been in gold…
This is what happened the last time gold saw a ‘low’ net long position…
and now, the aggregate net position in gold futures appears to have hit a threshold that in the past has created a significant short-covering rally…
The last 2 times aggregate net long positions were this low, gold rallied 21% and 17%…
Did we just reach that short-covering threshold once again?
