Analysis Of Last Friday's Commitment Of Traders Report For Gold

The somewhat counterintuitive headline for the report is, "Bullion banks trying to hold gold price higher." Its author, Dan Norcini, says that the liquidation by speculative longs is effectively over, even if there's not much added money coming in to bolster the price higher.

Long side exposure among the speculative community is at relatively low levels which is conducive to a period of consolidation. It will take a sharp move through the $1130 – $1135 level to see another wave of fresh capital coming into this market in a big way. I would not look for any excessive wringing out of speculative longs unless price were to fall below the $1,050 region.

His overall call is for a trading range:

Summary – the market has been purged and will now attempt to consolidate in its recent range with both bulls and bears looking to gain an advantage. The bullion banks are trying to hold price below $1,130 while decent buying of size has been seen down near the $1,100 level. There is extremely strong buying interest $50 below that near the $1,050 level.