Gold - Commitments of Traders Chart

The graph below shows the relationship between the commercials and the large speculators. They go the opposite don't they? When the commercials are long, the speculators are short and vice versa.

Gold - Commitments of Traders Chart

The commercials (producers) are producing and selling (short) and the speculators are buying (long) since 2002! Look where the price of gold is now. Even though the price has fallen in the last few weeks, the percentage remains the same. From here you can expect the price of gold to go higher! The sell-off is nothing but consolidation! People have been saying to sell gold now but that is not what the Commitments of Traders chart is telling us. It tells us to buy, buy, buy!

On a side note, if you don't know how to invest in gold and don't want to hold onto physical gold, you can look at the SPDR Gold ETF. In Singapore, it is traded like a stock on the Singapore Stock Exchange (SGX).