Gold down on heavy short-selling
Gold is down $16.25 this morning at $1329.50 under heavy pressure from short-sellers as shown in this morning’s Chart of the Day. As you can see, the spike in short sales is telling – 28 million ounces yesterday and another nearly 29 million ounces so far today. The only recognizable external cause to warrant a drop to this degree would be the reduction of tensions with North Korea based on its statement overnight that it was “committed” to denuclearization – something we would enter under the unlikely/dubious column.
The market action hearkens back to the days of unexplained waterfall drops in the price of gold in what looked like bouts of heavy black box, programmed trading. In the past, the effects have been short-lived as the short-sellers cover quickly to capture profits with programmed purchases. Long-term accumulators of the physical metal, at the same time, have viewed these waterfall drops as buying opportunities.
Chart of the Day