Short-term Gold Price Moves from a Different Perspective

By: Przemyslaw Radomski, CFA | Wed, Nov 23, 2011
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Based on the November 18th, 2011 Premium Update. Visit our archives for more gold & silver analysis.


 

45 days after the end of each quarter, the top hedge fund managers are forced to release data on their long positions to the Securities and Exchange Commission. They probably do it with great reluctance, but it does give us a keyhole through which we can peek into their investing philosophy and we, of course, are interested in their attitudes towards precious metals.

According to those filings, Hedge Fund Tycoon John Paulson made some key cuts in his holdings in the third-quarter, including slashing stakes in the SPDR Gold ETF (GLD) for the first time in more than two years. But this is no cause for alarm. According to a Dow Jones Newswire report, the hedge fund manager shifted money into gold futures contracts that didn't show up in the filings. Paulson held 20.3 million shares in the exchange-traded fund backed by gold as of Sept. 30, compared with 31.5 million at the end of June, according to Securities and Exchange Commission filings. The firm remained the largest holder of GLD.

Daniel Loeb, the CEO at hedge fund Third Point, who manages more than $2.4 billion in assets, bought Barrick Gold (ABX) this quarter.

Soros Fund Management LLC increased its stake in GLD to 48,350 shares from 42,800 and added options. Soros had sold most of his GLD holdings of 4.72 million shares in the previous quarter. Paul Touradji had 45,000 shares of GLD and Paul Tudor Jones had 200,000 shares, compared with none on June 30, the filings.

Even those of us who don't hold hundreds of thousands of shares of GLD are interested to know how gold and other precious metals will do in the short term. This week, we will provide you with only one chart, but taking into account its reliability in the past, it should prove to be a valuable addition to your analysis.

SP Gold Stock Extreme #2 Indicator

The above chart features our in-house developed SP Gold Stock Extreme #2 Indicator, which has recently moved below the dotted line. This normally indicates that we are at a local bottom or quite close to it. Previously, in 7 of the 8 times this has been seen in 2011, the local bottom was seen if not immediately, then still very soon. Seeing this a few days ago meant that additional few days of trading sideways or slightly lower prices are not out of the question, but that the decline is almost complete.

Therefore, higher prices for the precious metals sector appear to be just around the corner.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It's free and you may unsubscribe at any time.

Thank you for reading. Have a happy Thanksgiving holiday weekend and a profitable week!

 


 

Przemyslaw Radomski, CFA

Author: Przemyslaw Radomski, CFA

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Gold & Silver Investment & Trading Website - SunshineProfits.com

Przemyslaw Radomski

Przemyslaw Radomski, CFA (PR) is a precious metals investor and analyst who takes advantage of the emotionality on the markets, and invites you to do the same.

His company, Sunshine Profits, publishes analytical software that anyone can use in order to get an accurate and unbiased view on the current situation.

Recognizing that predicting market behavior with 100% accuracy is a problem that may never be solved, PR has changed the world of trading and investing by enabling individuals to get easy access to the level of analysis that was once available only to institutions.

High quality and profitability of analytical tools available at www.SunshineProfits.com are results of time, thorough research and testing on PR's own capital.

PR believes that the greatest potential is currently in the precious metals sector. For that reason it is his main point of interest to help you make the most of that potential.

As a CFA charterholder, Przemyslaw Radomski shares the highest standards for professional excellence and ethics for the ultimate benefit of society.

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer: All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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