You may know me as the guy using weird planetary alignments while assigning proper fundamentals to the gold sector, and recently even doing the same with a somewhat subjective and philosophical view of gold as an important counterweight or insurance component to a sensible portfolio. Or you may know me as the guy who confuses you with too many market indicators or annoys you with too many exposés of the more promotional and/or manipulative entities out there.

Or you may not know me at all.

If that is the case, let me introduce myself. My name is Gary and today I have a very simple post for your consideration. We will look at the now compelling views of the Commitments of Traders (CoT) data for gold and silver. While the prices of the metals are and have been technically bearish and the fundamentals are and have been poor, sentiment (CoT is ultimately a sentiment thing, after all) setups like those shown below should not be ignored. We are talking historic in silver and merely compelling in gold.

Along with noting the poor fundamentals, I have been writing about positive contrarian sentiment in gold for many weeks now. That is because, well… sentiment has been contrarian positive. While public opinion data have jumped around a bit, I think CoT is the ultimate sentiment indicator because it shows how the primary movers of these markets are positioned. So let’s get to it.

This afternoon CFTC released the data as of Tuesday the 4th and on that day an already positive data set had become more so. For gold the upper green box I’ve drawn in shows a contrarian bullish configuration of net short large Speculators and net long Commercials. The lower green box shows last week’s improvement with large Specs reducing longs and increasing shorts while Commercials did the opposite. This is a rare and bullish positioning. The red box is a very minor negative as the little guy (small Specs) remains net long, although he did press the short side last week.