Dear CIGAs,

As the C-wave began to accelerate from $439 on 8/23/05 to $692 on 5/16/06, commercial traders were heavily short.  Their net short position as a percentage of open interest was -50.6% on 8/23/05.  The lowest reading since 2001.  Like August 2005, the time is right for the C-wave advance.  When the time is right, price will follow.  As of 9/15/09, commercial trader net short position as % of OI -49.2%.  The most negative readings since 8/23/05.

Those advocating caution towards gold on the basis of commercial trader concentration on the short side, referred to as overloaded trade, ignore that gold’s strong advance from August 2005 to May 2006 developed from a similar "concentrated" position.

CIGA Eric

^[1]