With Stocks At Record High, Gold Shorts Nearly Double

That gold does not catch a break, even on a weak day for the dollar, is befitting of the conditions we find ourselves, in which markets are totally counter-intuitive.

But, mostly, shorts are out in full force, causing the gold price to fall.

The dollar has continued its weak spell, and will likely do so throughout the rest of the week, but gold has not taken note of the weak dollar, and its price remains weak.  On Monday, the dollar was at its lowest in more than a week as Federal Reserve Bank of New York President William Dudley said he is “getting more hopeful” though he did not signal that there would be a change to bond buying soon.

The dollar dropped specifically after Fed Chairman-nominee Janet Yellen said monetary stimulus was still needed to increase growth. She also cited numbers like an inflation rate of below 2%, which undermines her knowledge as a true economist, as these numbers have been disputed by reputable economists.

Dudley’s Opinion:

“While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015,” said Dudley today. “As growth picks up, I expect to see more substantial improvement in labor market conditions.”

Yellen has indicated that the Fed will continue printing.

Investors were bullish on gold last week due to anticipated printing, but early this week the gold price was brought down.

The net-long position in gold fell 37 percent to 55,456 futures and options in the week ended Nov. 12, U.S. Commodity Futures Trading Commission data show, the largest single drop since February. Short bets rose to 54,143, the highest since mid-August, from 26,490 a week earlier. Net-bullish wagers across 18 U.S.-traded commodities fell 12 percent to 576,224 contracts. Silver was cut the most in five months.

With November halfway over, there is knowledge that gold is cementing its downtrend, having setup the anticipation that it will post its first annual loss since 2000 as some investors lose their faith in the metal as a store of value.