Weekly Gold Futures Chart and your IRA

Source: Barchart.com

In the gold futures chart above (week ending November 25, 2016), the last segment shows the net positions of Commercial hedgers in red, Small speculators in blue and Large speculators in green. The Commercials were net short in June-October, 2016. If you look back from January 2014 to January, 2016, this was the largest short position they’ve been in for over 12 months. If you scroll up to the price chart you notice that gold prices peaked at $1,360 to $1,380 in July, 2016. This is no coincidence. When the commercials are net short with the largest number of contracts compared to the look back period of 12-16 months, prices have peaked and you can expect prices to drop .  Conversely, when the   Commercials  are net long and they hold the largest number of long contracts compared to the look back period of 12 – 16 months,  price is close to the bottom and you can expect prices to flatten, go sideways or rise.

If you’re looking to buy physical gold for your IRA you should buy when prices consolidate at  support. This futures chart is only a guide as to where gold prices may be headed. The chart and comments are for educational purposes only. Please consult you investment advisor for investment advice.