The Commercials have indeed liquidated their short positions in the steepest liquidation of the past fifteen years, but there’s “another part” to the story: that of the Commercials being Net Long.

I’ve corrected my earlier post and will provide that update in this new post in case some miss the correction of the older one.

Commercials include others than just producers (miners) such as fabricators and jewelers who could be long to protect themselves from rising cost of the metal they need. The time period highlighted by the green rectangle shows the PEAK Net Long Gold Positions of the Commercials on Comex Gold. The Commercials could have been Net Long a smaller number of contracts for some years earlier in what was a seemingly endless Secular Bear market for gold (1980 – 1999).

As for another sentiment indicator, the Percent Bullish among newsletter publishers and CTAs tracked by Consensus-inc. has recently dropped to 24% – the lowest it’s been since 2004.