It’s not every day you see a correlation quite like this:

Indeed, as the chart’s providers, RBC Capital Markets, noted on Tuesday — net speculative long positions on Comex reached a new all-time high of 28.5 MMoz last week, while aggregate gold ounces under management of the six largest gold ETFs increased only slightly week over week to 49.1 MMoz.

All of which foretells, according to RBC:
The weak physical demand for gold combined with the rapid rise in the speculative activity could give rise to a sharp correction, especially if the US dollar rallies.

Related links:
In defence of energy speculators – FT Alphaville
Bull in a China bullion shop - FT Alphaville
Looking at precious-metal flows – FT Alphaville

This entry was posted by Izabella Kaminska on Tuesday, September 22nd, 2009 at 10:58 and is filed under Capital markets, Commodities. Tagged with commodities, Dollar, etfs, gold. Edit this entry.