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GOLD - COT INDEX

Looking at the last COT report for gold, it's always important to look at the Net Position of the Commercials (Bullion Banks).

Using the Net Position of the commercials we can use one common indicator that I want to show you how to construct is called the COT index.

The calculation is below

COT index = 100 x (current Net – Minimum Net) / (maximum Net – Minimum Net)

You can see it looks like the Stochastic . Here i am using a period of 104 weeks.

As you can see in the chart below the Commercial activity is often in the OPPOSITE direction of the markets trends.

Last week the Commercials. were net short 131872. The last similar value was last December 2017 with a value of 128217.

We can assume “at least” a sizeable rally such as that from Dec 12 to Jan 25: 1240-1365!

Beyond Technical AnalysisTrend Analysis

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