Managed money positions hint at bullish turns for gold and silver [goldmoney]
July 16, 2012 Leave a comment
I have recently written about the breakdown of disaggregated data from the futures markets into producers and swap dealers for gold and silver futures, as reported in the Commitment of Traders reports issued by the US government’s Commodity Futures Trading Commission (CFTC). There is a further category of trader to consider, and that is Managed Money.
According to the CTFC, “A ‘money manager’ is a registered commodity trading advisor (CTA); a registered commodity pool operator (CPO); or an unregistered fund identified by CFTC. These traders are engaged in managing and conducting organized futures trading on behalf of clients.” So it ranges from the advisory and discretionary clients of brokers and investment managers, to mutual and hedge funds. These are the users of the market who effectively represent the general public.
Managed money is often regarded as a contrary indicator, with good reason: the public is usually late on the scene, buying at the top and selling at the bottom, so a bullish chart would be one with a generally low level of long positions and a high level of short interest. Happily this is confirmed for both gold and silver in the charts below. First up is gold.