Hedge Funds Dump Gold Longs By The Most On Record

Tyler Durden's picture

Hedge funds dumped almost $6 billion notional in gold futures last week.

That is the largest drop in hedge fund longs in the history of CFTC data.. and the precious metal has stabilized since.

While this is the largest drop on record, there were three other weeks when this approximate selling level was achieved and here is what happened next... 3/6/07 (+9.6%), 3/6/12 (+3.25%), 5/24/16 (+14.6%).

One wonders what happens next?

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Raffie's picture

Ok move gold up $1 then crush it to the $900 range...

Gotta love gold ol hindsight.

https://cointelegraph.com/news/simply-wow-10000-bitcoin-investment-in-20...

 

 

 

remain calm's picture

That's a weird headline because Stanley Drunkenmiller just said GOLD is his largest cash position ever. Weird, because nobody reported that. Hmmm.

giovanni_f's picture

it is the large gold speculating hedge fund assholes and the overpaid mining company ceo dumb asses who keep on buying and selling, respectively, from and to the slumlords from the paper gold casino. It is these dorks - not the bullion banks or the BIS - who are giving full legitimacy to the paper gold construction. Without paper longs and miners selling at casino conditions there would be no "evil" manipulation possible. No idea if GATA gets it that when it comes to precious metals the victims are craving for being raped. It is probably only the mining ceo's who are delighted contributrs to a system that directly afflicts damage to them by price-suppressing their one and only product. One exception is Keith Neumeier from First Majestic but he is a lonely (albeit successful) fighter.

And no GATA, it is not the bad bullion banks, it is the victims that contribute to the paper scam more than the evil manipulators.

Hurfenurbler's picture

The linked article says "In contrast, an investor who purchased $10,000 worth of gold in 2010 would have experienced a negative return of $9,981."

Hilarious.  How can you believe anything in the article when it says something as wrong as that?

Davidduke2000's picture

They count the money you did not make as a loss. 

Kaiser Sousa's picture

checked in with my PHYSICAL Gold Maple Leafs,Libertads, and Eagles over the weekend...

they said "dont worry Kaiser...we're not like PAPER Gold and we will never leave you..."

DEATH TO THE MONEYCHANGERS.

bitcoin-bitchez's picture

I sold all my gold for bitcoin and im up bigly. Who needs a pet fucking rock collecting dust?

Haus-Targaryen's picture

Up bigly against what?  Our mark-to-fantasy currency? 

Congratulations.  

Kaiser Sousa's picture

obviously he has confused electronic tullips denominated in worthless paper currency with Real Money...
what a maroon....

Raffie's picture

Gold/Silver when the power grid goes down or we go back to bartering.

Btc/Eth when the war in fiat gets worse.

Maybe its me, but having more flexible assets for various conditions seems better to me.

Kaiser Sousa's picture

i aint mad at BitCoiners...

they r free to believe in whatever they wish...

but they should understand the difference between MONEY versus ANY currency du jour before they say stupid shit like Gold being a "pet rock"... thats so idiotic and Warren Buffish...

3LockBox's picture

I don't know...

Being that the Bitcoiners are the most relentless spammers/posters on earth tells me all I need to know.

The BTC alcolytes are walking/talking annoying billboards that will post boards into oblivion.

Smells so much to me like a tulip mania or a big freaking ponzi.

underthevolcano's picture

I've have both, bought and sold both, and have made good profits on both, including etherium, which shot up from around 30 to 130. Can't argue with those numbers. And as for anyone who believes in green paper with an attached 'promise to pay', all I can say is, pay with WHAT? Nobody wants what you have, but everbody in the US wants what everbody else has.

There will be a break at some point. The debt is simply unsustainable and when they have finished draining the plebes of all their assets, gold will still be there.

Collectivism Killz's picture

You speak like a real invester. If a comment conveys an emotional attachment to an asset, it reveals one's sophomoric understanding of reality. I personally own a lot of cryptos and an equal amount of PMs. I see no reason to let me ego drive my decision, both have their place and time. For now, cryptos have been shining. I feel this is because we are still in the early phase of a collapse where capital flight occurs. When full faith in governments collapses, then gold and silver will also have their day in the sun. I also keep plenty in cash and stocks, because I don't see this being a quick process, in spite of what some "alt" pundits have been claiming for the past decade or so.

sessinpo's picture

I  was thinking about the power grid today. For some reason the thought came to me that if the grids went down for a nationwide blackout, it would be done by our own government.

withglee's picture

Up bigly against what?  Our mark-to-fantasy currency? 

Congratulations.  

While gold is down bigly against what? Our mark-to-fantasy currency? Congratulations.

Both gold and bitcoins are crude standins for real money ... i.e. "in-process promises to complete traders ... created by traders and destroyed by traders on delivery. They both thing money needs to be scared to have value. What utter nonsense!

Bitcoin and gold, are open ended on both the supply and demand side. They can never hope to maintain perfect perpetual balance between supply and demand for money ... a sub-minimal attribute of any money to guarantee perpetual zero inflation of the MOE itself.

SeuMadruga's picture

"While gold is down bigly against what? Our mark-to-fantasy currency? Congratulations."

One could argue that you just made his point for him, as phony ("fantasy") currency shouldn't be the yardstick to either up or downsizing any asset (always incorrectly) measured against it.

Regarding "real" money, I'd rather one NOT based on any "promises" (i.e. debt) at all, thus enabling instant and complete trading settlement according to the relative value for the exchanged itens freely and subjectively agreed upon by the parts involved at the moment of the transaction, subjectivity that btw normally allows inflation or deflation of future deals prices, rightfully reflecting peoples' preferences.

withglee's picture

One could argue that you just made his point for him, as phony ("fantasy") currency shouldn't be the yardstick to either up or downsizing any asset (always incorrectly) measured against it.

One could argue that ... and one would fail. The yardstick for an :proper" MOE process would be unvarying over time and space. The best yardstick I know of is the HUL (Hour of Unskilled Labor). It has traded for the same size hole in the ground over all time. We all traded our HULs at one time ... and now trade in multiple HULs (unless we work for McDonalds). Can you name a better one?

Regarding "real" money, I'd rather one NOT based on any "promises" (i.e. debt) at all, thus enabling instant and complete trading settlement according to the relative value for the exchanged itens freely and subjectively agreed upon by the parts involved at the moment of the transaction, subjectivity that btw normally allows inflation or deflation of future deals prices, rightfully reflecting peoples' preferences.

It's not something you can "rather". Money "is" a promise. It enables simple barter exchange over time and space ... always has been and always will be.

thus enabling instant and complete trading settlement according to the relative value for the exchanged itens

Without money, that "relative value" is a perception of the traders in a simple barter exchange in the here and now. In your perception gold is that something of value, Though neither trader really wants it, they have a perception of what it will trade for someplace else in the future ... and that perception is undermined by reality.

The dollar "also" performs that exact same function in the exact same way (but unlike gold is "real" money) ... with neither trader really wanting it but having a perception of what it will trade for in a later time and different space.

In the last 4 years the dollar has served that perception better than gold. But both are hopeless flawed as money because in one case it's just stuff. In the other case it's in an "improper" MOE process where one trader (governments) are freely counterfeiting it ... and money changers are demanding arbitrary tribute (they call it interest) to be involved.

 freely and subjectively agreed upon by the parts involved at the moment of the transaction,

And that's where all trades begin. The process is (1) Negotiation (which you describe); then (2) Promise to deliver (which you describe in the there and then); then (3) Delivery (which you describe in the there and then with the hope for another trade later in the here and now).

Money enables (2) and (3) to happen over time and space. What you describe has (2) and (3) happening simultaneously on-the-spot. Thus, "no" money is created at all ... though previously created money is most commonly used in the exchange ... at the risk of the trader accepting it if an "improper" MOE process is instituted.

A "proper" MOE process guarantees that risk (inflation) to be zero over all time and space. And if faithfully delivers on that guarantee ... just like the governor on an engine guarantees and maintains its running speed.

Gold, pretending to be money, does not do that ... nor does the dollar from our "improper" process ... not because the dollar is not real "stuff", but because it is from a corrupt process (allows free government counterfeiting and tribute demands from money changers).

subjectivity that btw normally allows inflation or deflation of future deals prices, rightfully reflecting peoples' preferences.

Wrong ... and double wrong. With a proper MOE process (ideally with units of HULs (Hours of Unskilled Labor)), the exchange media is "guaranteed" by the process to never inflate or deflate over time and space. It can't. A simple look at the process proves it.

And money cares nothing about "people's preferences". If a trader creates money by getting his promise certified, he must return that exact amount of money and destroy it on delivery. If he DEFAULTs, the orphaned money is reclaimed by INTEREST collection of like amount ... and destroyed. Money has no perception of what he promised or why. Thus no money exists before or after the money creating promise and delivery.

"All" money therefore represents "in-process promises to complete trades over time and space". It cannot be otherwise.

Have your religion if you want it. In my space, religion is not required nor welcome. It leads to bad behavior.

 

SeuMadruga's picture

"Hey, Doc" ! HUL as "money" ?! Could you please elaborate a bit more the specifics of that in order to enlighten this "religious" atheist who has advocated nothing but the simple, intelligible, time-proven system comprising a convenient (e.g. www.goldmoney.com) commodity such as precious metals as MOE, instead of a priggish, "idealistic" process based entirely on promises of future trade settlement in...man-hours (btw, resembling pretty much the current omnipresent debt-backed currency already deriving its "value" out of people's drudgery in the form of taxation to be coercively collected from them, even at gun point) ?

What is and who should bear the power to establish a "correct" value for labor (either unskilled, or any of the infinite possible degrees within the specialization spectrum, and that must be accepted\agreed upon worldwide if global commerce is to be maintained) ?

Isn't it (labor) just a means to an end (namely, the production of stuffs actually\voluntarily demanded by society) ? Otherwise, by simply engaging in any activity (however useless, like the proverbial ditch digging-plugging), one's entitled to something regardless of his\her contribution to the creation of true value (which on a free world can only be subjectively defined by each individual involved in the transaction).

For instance, an entrepeneur who comes up with a better cost/benefit solution to people's needs by devising a cheaper and\or higher quality service\product requiring, say, less man-hours to be provided...should receive less purchasing power as payment for his\her own contribution in increasing the available wealth ?

I might be wrong, but your entire idea sounds too marxist to me, embedding in itself a huge dose of control and enforcement (presumably through a totalitarian entity such the state) over people to be remotely feasible, besides bringing with it a constant tweaking in the "flux capacitor" to finally work (precisely the way central banks\planners are doing since at least a century ago).

withglee's picture

 new SeuMadruga withglee May 17, 2017 2:21 PM

S: "Hey, Doc" ! HUL as "money" ?!

WG: No. As a "unit" of money. A unit that never changes its meaning over all time and space. Obviously an "ounce" doesn't change its meaning over time and space ... but an ounce "of gold" sure changes its meaning in a trade. Just look at the last 4 years. Contrast that with an "hour" spent digging a hole. The hour doesn't change over time and neither does the size hole it will deliver. The size hole an ounce of gold would deliver 4 years ago is considerably smaller than the size it will deliver today ... not so for a HUL. A HUL is a better measure for the purposes of money than an ounce of gold.

S: Could you please elaborate a bit more the specifics of that in order to enlighten this "religious" atheist

WG: Religion pertaining to a super natural being is just one of many types. Here we are dealing with the religious belief that gold is money ... because it has been so for 5,000 years. You've heard that argument I'm sure.

S: who has advocated nothing but the simple, intelligible, time-proven system comprising a convenient (e.g. www.goldmoney.com)

WG: actually that's where most of my gold is. And it unfortunately trades for less now than when I contracted to put it there. And my test to actually get an ounce of it out in yellow stuff yielded a 10% leak ... including the "import duty" I had to pay.

S: commodity such as precious metals as MOE, instead of a priggish, "idealistic" process based entirely on promises of future trade settlement in...man-hours (btw, resembling pretty much the current omnipresent debt-backed currency already deriving its "value" out of people's drudgery in the form of taxation to be coercively collected from them, even at gun point) ?

WG: And your "advocacy is obvious misguided by your failure to understand that money is obviously a promise. I can illustrate and prove it in less than 300 words and I challenge you to disprove or refute that illustration and proof. 

Any time money itself has real value rather than "realizable" value, it ceases to be money. When "stuff" is exchanged, the simple barter exchange is completed in the "there-and-then". Money is only needed to enable simple barter exchange "over time and space" ... and to do that it must maintain perpetual supply/demand balance over that period. "No stuff" can ever do that. It is "the process" that does the backing. As long as the "proper" process exists and is operating as specified and continuously transparently verifiable, the money will exchange with guaranteed zero inflation (of the money itself) over all time and space. That makes trading over time and space immeasurably simpler and less risky. And that operation is simple robotic arithmetic. It has nothing to do with taxation or guns or even people's drudgery. It is only related to people's time on "non-skilled" drudgery for reference ... because "all" people at one time in their lives trade with HULs ... their very own HULs. From that point on, they have a frame of reference for it's value. Contrast that with gold (which they have no use for and most have never traded with) and dollars (the frame of reference of which changes with money changer whims and perpetual government counterfeiting).

S: What is and who should bear the power to establish a "correct" value for labor (either unskilled, or any of the infinite possible degrees within the specialization spectrum, and that must be accepted\agreed upon worldwide if global commerce is to be maintained) ?

WG: The trader who accepts money "created" by another trader does that. If I buy a house from you for 700,000 HULS (or $100,000), I get the house ... you get the HULs. We both share a perception of the value of the HULs ... and only the two of us have to share that perception. That same day ... or in 10 years and a day ... those 700,000 HULs will still trade for 700,000 holes in the ground of equal size. They may, but likely will not, trade for that same house ... even the very next day. That trade in units of dollars or ounces of gold and silver is just unnecessarily complicated ... like trying to measure with a rubber ruler. A single HUL may or may not trade for an hour of a person working at McDonald's. That's up to the person and McDonalds ... and is a function of the supply and demand for labor ... not of the meaning of a HUL.

S: Isn't it (labor) just a means to an end (namely, the production of stuffs actually\voluntarily demanded by society) ?

WG: Sometimes. Brainpower is a more common means. Having "control" of stuff is also of value in trade (e.g. a stand of trees), all can be related to a constant unit of measure ... a HUL. All can be related to a varying unit of measure ... a dollar or an ounce of gold. Take your pick. There is a right and wrong pick. You actually make such a pick every single day ... and choose the dollar. The ounce of gold is too clumsy and expensive to use ... and the HUL measure of a "proper" MOE process doesn't yet exist. If it did, you would be trading with HULs ... not dollars ... by your choice. You are already making the choice not to trade in gold.

S: Otherwise, by simply engaging in any activity (however useless, like the proverbial ditch digging-plugging), one's entitled to something regardless of his\her contribution to the creation of true value (which on a free world can only be subjectively defined by each individual involved in the transaction).

WG: Correct ... and irrelevant. If you engage in pouring gallons of water onto the ground, that says nothing about what you have accomplished. But the gallons is a unit that never changes over time and space. The value of pouring it does change. The value of the hole a HUL produces does change ... but the size of the hole a HUL produces does not change. It's a unit of measure ... not a unit of value.

S: For instance, an entrepeneur who comes up with a better cost/benefit solution to people's needs by devising a cheaper and\or higher quality service\product requiring, say, less man-hours to be provided...should receive less purchasing power as payment for his\her own contribution in increasing the available wealth ?

WG: No. But you're way off on a tangent. When you pay 700,000 HULs for a house, you don't think of digging 700,000 holes. You think of the hours you personally will have to spend to get those 700,000 HULs back over 30 years as you promised. If you invent that more efficient process in that interim, you'll have less difficulty getting back those HULs. If you're a COBOL programmer, you'll have lots more difficulty getting back those HULs than you originally anticipated. It's all in your perception ... but you "will" return and destroy 700,000 HULs regardless of how you get them. The MOE process doesn't care why you made that agreement ... just that you deliver as promised ... i.e. return 700,000 HULs which it guarantees have not changed their own meaning over any time span or space involved.

S: I might be wrong, but your entire idea sounds too marxist to me, embedding in itself a huge dose of control and enforcement (presumably through a totalitarian entity such the state) over people to be remotely feasible, besides bringing with it a constant tweaking in the "flux capacitor" to finally work (precisely the way central banks\planners are doing since at least a century ago).

WG: Well, that leaves you with the task of explaining your perception of Marxism ... or me having the same perception. I know, of course, that this is about arithmetic and has nothing to do with any kind of "ism" whatever .. unless that would be "traderism". There is no planning involved. The only thing central is the adding machine ... well, actually, that isn't even central. Only the ledger is central (to the process ... not in a single or central location ... think block chain) and universally perpetually open to inspection in real time.

See how easy it is for you to distort your own thinking? This is "not" rocket science. It's addition and subtraction.

SeuMadruga's picture

"Obviously an "ounce" doesn't change its meaning over time and space ... but an ounce "of gold" sure changes its meaning in a trade. [...] The hour [of "unskilled labor"] doesn't change over time and neither does the size hole it will deliver."

"A single HUL may or may not trade for an hour of a person working at McDonald's. That's up to the person and McDonalds ... and is a function of the supply and demand for labor ... not of the meaning of a HUL."

"[...]That same day ... or in 10 years and a day ... those 700,000 HULs will still trade for 700,000 holes in the ground of equal size. They may, but likely will not, trade for that same house ... even the very next day."

I spot a blatant double-standard here, for replacing "HUL" with "GAU" on the second sentence above doesn't invalidate it. Both money units maintain their definitions ("meanings") regardless of anything (i.e. an ounce of gold is always an ounce of gold, just as a hole - or its proxy "HUL" - is always a hole - or "HUL"), while both their "meaning in a trade" (value) are subjective, possibly changing through time, space and, most importantly, for the persons involved in the valuation).

"[...] The value of the hole a HUL produces does change ... but the size of the hole a HUL produces does not change. It's a unit of measure ... not a unit of value."

So is an ounce of gold: always an ounce of gold, regarless of its changing value ! Tautologically, one "HUL"(or GAU) equals to one hour (or gram) of labor (or gold). And gold at least doesn't derive its future existence from anything else, much less from a flimsy confidence of obtaining back 60 min of someone else's unskilled work. Gold already is, right now, and'll be forever, not subjected to any destruction.

"[...] The size hole an ounce of gold would deliver 4 years ago is considerably smaller than the size it will deliver today ... not so for a HUL. [...]"

Gold price was around USD1360/trOz on May/17/2013 whereas right now that same "yellow metal" quantity is trading for USD1250. Thus, a Au troy ounce'd probably buy more labor back then ("4 year ago") - hence a bigger "hole" (or more of a standardized one) - than today.

But the worst about your "system" (predicated on an unwarranted, haughtily-uttered assertion ["obviously" disproven by History, which renders any "challenge" on this a pointless activity] that money can\has to be only a promise of future delivery, but NOT a convenient intermediary physical object to maximize efficiency of instantly-settled bartering, as it's been for millenia worldwide and still is, when considering companies such as Goldmoney, of which you're user !) is its complete reliance upon people's willingness (given any enforcement dispensed with, according to your own saying) to ascribe\recognize any value to\on a mere purported token supposedly bearing a sacred convertibility on labor (specially over a distant future !) as though it was a magical ("religious") work store from which the owner could always and unilaterally "redeem" into multiples of an "unskilled-labor" (fixed) ammount to be promptly\infallibly honored by the issuer, like BTU's extracted out of readily available oil, except that in the former case the issuer of "HUL's" (a person) could very easily just default on his\her obligation (due to death, for one), while in the latter its simple possession suffices to provide the holder with a real energy source to tap from anytime anywhere, resulting on a much higher probability of maintaining some desirability for others through time. In other words, it's endowed with intrinsic value eliminating counterparty risk (to guarantee the very attributes that value stems from in the eyes of others), a crucial sound money prerequisite found in commodities such as precious metals (btw, look at NASA's James Webb Space Telescope lens gold coating: jwst.nasa.gov/mirrors.html).

"[...] If I buy a house from you for 700,000 HULS (or $100,000), I get the house ... you get the HULs. We both share a perception of the value of the HULs ... and only the two of us have to share that perception."

Another glaring predicament in your "creature" (shared amongst all fiat-currencies) is how every unit of supposedly fungible (i.e. indistinguishable from units issued within other trades, which then couldn't be rolled back for the sake of any collateral claim) and in fact unbacked "HUL" (no enforcement nor redemption of the assets that originated the fungible unit-of-labor "money") comes into existence in the first place: through a physically unconstrained process that by design cannot impose any limits whatsoever to the ammount of (de facto unbacked) "HUL's" discretionarily sprung up out of traders whims in each single transaction. After all, what would prevent the two of us from agreeing upon conjuring up a huge volume of "HUL's (in order to close that real-estate deal) in relation to the total pool of "HUL's" already emitted ? Nothing could refrain us from incurring in such a currency inflation to the detriment of previously existing monetary base's purchasing power, bc the quantity of "hours of unskilled labor" required to build that particular house is highly subjective, and no one'd be able to dispute that ! Therefore, this ruse'd become the rule, kicking-off a second-order chain-reaction on all traders, naturally establishing as their usual behaviour getting rid of HUL's as quick as possible, triggering more price inflation due to rampant money velocity.

"The ounce of gold is too clumsy and expensive to use[...]".

I thought your were a Goldmoney client, who is able to costlessly receive from or send to any other platform user the ownership of at least one mg of fully allocated, off-(custodian's)-balance, redeemable physical gold, just as easily as your "HUL's" or any other digital currency.

"That trade in units of dollars or ounces of gold and silver is just unnecessarily complicated ... like trying to measure with a rubber ruler."

"Complicated"? "rubber ruler" ? LOL ! Seriously ? Is this some kind of joke ? What about your laughable "system" ?! Why don't you expose it daily (with as much detail as you can use in the description) @ ZH or in any other famous public forum, and perform a survey with readers on which type of money is more convoluted and elastic: PM's vs "HUL" ?! Yours' actually is no different from any physically-unbacked (i.e. not redeemable) crypto-currency blossoming every week that presents no bridling features to curb any boundless issuance.

BTW, have you already launched it and are just sales-pitching ? If not yet, go for it ! The three-letter name you came up with ("HUL") fits the forex standard just fine...though IMO this rabbit "hole" has run too deep into this ship's "HULL".  ;-)

Anyway, thanks for the talking. It was instructive. And fun !

ps: is it you on that avatar ?

0valueleft's picture

What's your imaginery friend going to do with all that gold you sold him? Sell it and buy bitcoal from your other imaginery friend? Is there tea and stuffed animals at your board meetings?

It's fascinating imagining your empire growing.

Davidduke2000's picture

Gold is at $1750 CND, for Canadians,  people with gold kept their wealth and laughing at the rest because the bullions are not taxable, while people trading futures are taxed.

Bopper09's picture

Why compare an ounce of gold to a failing fraudulent fiat currency?

NoWayJose's picture

Obviously 'someone' was selling last week -- whether they actually owned either paper gold or phyzz is another matter...

underthevolcano's picture

It wasn't physical, I can assure you of that. Just some cash flow adjustments.

Anarchyteez's picture

Whatever....

Sit tight, n be right.

bitcoin-bitchez's picture

Yeah sure, only been what 6 fucking years? How long are you planning to wait? You will be 80 years old and pissing/shitting in your diapers in some nursing home before gold moves above 1300

CultiVader's picture

His grand children will appreciate his patience.

Dame Ednas Possum's picture

And you'll be the schmuck on minimum wages cleaning up after him. 

 

 

youngman's picture

and about a month ago Goldman Sachs said it was going down to 1200...and they took it thtere

CultiVader's picture

Hold! Hooooolllld! Hhhhooooooollllllllld!

underthevolcano's picture

Whenever anybody questions gold, I have 2 things to say. One, it has been around for over 5,000 years when the average fiat currency lasts, what, about 150 years, and if gold is so 'open ended' then why do millions seek it and why do central banks and governments hoard it?

Well, that is because it is, and always will be the universal asset, along with silver.

FinsterF's picture

If somebody asks why own gold, I say it's the wrong question. It's the default asset ... it's what you own until you have a reason to own something else.

bookofenoch's picture

Some central bankster.org disgorged imaginary gold digits. Guess that means all is right with the world & time to buy Snapchat

jpot34's picture

GOLD/SILVER phyzz, baby!!!!!  I have the time, do you?    :>))

Davidduke2000's picture

the magic word is gold futures, paper gold is not real gold because nobody in his right mind would sell bullion, there are buyers waiting to pay premiums to get gold by the tons. 

ali-ali-al-qomfri's picture

whenever some one dumps some gold longs, the lavs get backed up.