Last Gasp Of The Gold Bears

Gold Futures from the Comex for May:

Contract MonthProduct Code
First Trade
Last Trade
First Holding
Last Holding
First Position
Last Position
First Notice
Last Notice
First Delivery
Last Delivery
MAY 2013GCK13

About Gold Futures (from the Comex):

Gold futures are hedging tools for commercial producers and users of gold. They also provide global gold price discovery and opportunities for portfolio diversification. In addition, they:
  • Offer ongoing trading opportunities, since gold prices respond quickly to political and economic events
  • Serve as an alternative to investing in gold bullion, coins, and mining stocks
Things to know about the contracts:
  • Physically delivered
  • Block-trade eligible
  • American-style options
  • Can be traded off-exchange for clearing only through CME ClearPort

My view:

As the table above shows, the last few days of May are when the futures will be settled with physical metal.

What will be highly informative, is the results of the settlements and the effect on the spot and futures markets.

Anecdotal evidence points to shortages of physical commodity on a regular basis.

Will the paper gold holders be able to drown the market in over-leveraged paper claims as the bullion supply continues to tighten?

Additional evidence of growing support for the metal is the commercial net short position that continues to shrink to under 40,000 contracts.

Given the present downward momentum of gold and the miners, we could see a double bottom formation develop before the metal and miners finally resume their upward trajectory.