Carley Garner, Senior Commodity Broker at DeCarley Trading, sat with Kitco News on July 28, 2015 to chat about the metals markets

Click on the image to begin playing the video of the Kitco and Garner chatting about the gold futures market. 

Large speculators are almost always long gold; in fact, you would have to go back nearly fifteen years to find a time at which this group of traders were holding a net short position. In modern times, the question hasn’t been whether the “smart money” was long or short gold, instead it was how long are they?

At the moment, the answer to that is minimal. Those with deep enough pockets to be categorized as long speculators by the CFTC, are holding a mere 20,000 (approximate) in net long gold futures. To put this into perspective, at the peak of gold in 2011 this group was net long roughly 250,000 contracts.  The fact that they are holding a small bullish position tells us that this group has plenty of ammo to use should the market start heating up again. Further, they might be eager to get “longer” on large dips into support.  Accordingly, we believe gold prices could be trying to find a bottom. Look for support near $1,080 to hold, but we cannot rule out a quick spike lower toward $1,040 if the fundamental market news doesn't support gold in the short-term.