Safe-Havens Are For Suckers: Specs Have Never Been More Short Bonds & Gold

With stocks at record high (price and valuations), and US macro data rolling over hard, it seems - based on speculators' positioning - that only a sucker would worry about downside risks right now...

Markets shrugged off a weaker than expected employment report (and constantly weaker than expected macro data) this week..

With VIX Futures and options speculative positioning is now at its most net short since Dec 2017...

As it seems investors have throw in the towel on worry.

Speculators have added to their aggregate Treasury short positions for 4 of the last 5 weeks, with this week showing the biggest addition to shorts since Nov 2017...

 

And hedge funds have never been so short gold... having added to shorts for seven weeks running...

 

But no matter how much speculators pile into USD longs, the greenback refuses to rise any further...

What could go wrong?

Comments

Mr_Potatohead Mungo9000 Sun, 08/05/2018 - 17:54 Permalink

" What happens when those short positions are closed all at once? "

Party time for the shorts because that's probably the plan for making a huge amount of money while ending the game in their favor.  How?  Paper promises related to the spec market are at least 2 orders of magnitude greater than the underlying physical.  There's no way this game ends with a crazy short covering.  The more likely scenario is continued hammering by the shorts followed by one last waterfall to a conveniently low number, such as $800. Low enough to make a financial killing, yet high enough to be credible.  Probably will occur when the next financial crisis happens.  Maybe a cyber attack on US financial markets.  Seems like something the Russians might be blamed for.  Whatever the case, PM markets closed indefinitely.  All positions settled with freshly printed cash at the closing price (i.e., $800).  If you have doubts about this being legal, check your prospectus and the laws rolled out since the last financial crisis.

In reply to by Mungo9000

currency Sun, 08/05/2018 - 17:23 Permalink

Gold and Silver along with PGM's are oversold and we shall see a Counter Trend Rally but all have not see their lows and after the counter trend rally they all sink.

In.Sip.ient Sun, 08/05/2018 - 17:28 Permalink

Guys are missing the point.

 

Gold and treasuries could go down

during the initial stages of a market bear.

 

People SELL for CASH   ...you know?

 

Where the fun starts is the gov'ts position

in said bear market.  When gov'ts  intervene

( IF they can intervene ) ...that's when gold starts to shine!

 

valerie24 In.Sip.ient Sun, 08/05/2018 - 18:31 Permalink

Obviously you've done a little bit of homework, gold went down initially in the 08-09' selloff but it had been strong prior to.

Treasuries will not go down in a selloff. Watch the rush into treasuries if there's anything serious.

Gold this time is already in the tank, no clue how much selling could be left but in the paper markets they can manufacture an infinite amount of selling.

Seems like even though you've done some homework, you might be new to gold's performance during crisis.

It hasn't been insurance nor has it been safe.

In reply to by In.Sip.ient

buzzsaw99 Sun, 08/05/2018 - 17:36 Permalink

what could go wrong?  i believe we have a heaping helping of usa treasury auctions on for next week.  really hoping for an interesting week for a change.

mastersnark Sun, 08/05/2018 - 17:55 Permalink

As long as infinity paper gold can be sold on Comex, and deliveries be ignored, I think the price of gold is going to remain as soft as...well..gold :)

Silver Savior Sun, 08/05/2018 - 18:38 Permalink

I worry about the downside all the time. The dollar has lost so much purchasing power that I don't care that stocks have risen because it takes a lot more dollars to buy the same items and services. 

The stock market is in a melt up causing nominal confusion. I will stick to safe Haven's. Fuck to losing my ass in the great depression that's on its way.

I will be one rich MF instead.

Jungle Jim Sun, 08/05/2018 - 21:20 Permalink

I forget the names of the "gurus" I stupidly listened to. I do have to say that the arguments they made at the time seemed so reasonable, the logic was so unassailable.

The beach ball had been held under water so long, it was wet and slippery, the cartel's grip was slipping, failing ... the ball *had* to go up, *way* up.

And, for a short while, it looked like that was true. Then ... the torpedo hit below the water line.

SuperCycleBear Sun, 08/05/2018 - 22:57 Permalink

I think it is a well established piece of market intelligence that the majority of buying that occurs when a market breaks to new highs is short covering. There's plenty of uel for that fire being laid now, imo.

OverTheHedge Jungle Jim Mon, 08/06/2018 - 01:28 Permalink

"When in trouble, or in doubt...

...run in circles, scream and shout"

All of this is only relevant if you are planning to buy, or to sell. If you own shiny, why do you own shiny, and what changed today that didn't hold yesterday?

If you are looking for the next tan-bagger, may I suggest bitcoin. Gold will always be a dull, boring "investment", until the sky falls, whereupon you will still have some gold, which is more than the holders of random bits of paper are likely to have.

Some people believe that the price of gold will fall to zero. Other people have good logical reasons to suggest gold will move to $10k. None of this seems to matter, and gold will bounce along roughly where it is, until the next seismic shift. The only question is: can a manipulated market be manipulated for EVER? Or does reality occasionally raise its beautified, shiny head?

Find out, in next week's thrilling episode of Bankers Win, Coming and Going.

Please remember the value of stocks may fall as well as plummet. Any advice is not meant to be acted on, and if you are too stupid to understand that giving your money to a financial "advisor" just means there are now 17 layers of parasites who need to suck you dry before you will ever make a profit, it is far too late for you.

In reply to by Jungle Jim

platyops Mon, 08/06/2018 - 01:34 Permalink

Stay away from platinum. It's value is mostly based on the auto production industry. Stay in gold even if it goes to $35 an ounce. Check out what $35 would have bought the last time it was $35 an ounce.

Keep Stacking!

MrSteve Mon, 08/06/2018 - 10:08 Permalink

Wiped out by PM prices now? That is where the “pigs get slaughtered” aphorism comes from, by not using position limits for risk management and capital preservation. Fools go all in, back up the truck and buy with both hands and so they are soon parted from their money. 

The reason premium on platinum is so high is because the dealers are stuck with losses on the spot price. Platinum phys trades in extremely small volume and so inventories are very aged compared to Ag and Au. Old platinum is expensive platinum and so a big markup is just catch up in an illiquid market. Remember, a dealer’s mission is to not take losses, they need to lay off big positions the same way bookies lay off sports bets by the hometown cheerleaders betting on their favorite team.