Here's the latest COT Report for #GOLD. As you can see, the one part that matters most, the Commercials, did not come into a consensus whether to buy or to sell the precious metal. Slight advantage though could be seen in the Bears, who sold 230,983, as opposed to the Bulls, who couldn't beat the strong supply offered by the Commercial Bears. Note that this Report is a few days old, and could not simply be used to predict further direction of the trend.

Summary of the COT Report

One portion of the participants are FAR more important to watch than the others : The Commercials. The Big Whales, The Deep Pockets The Deciders. These are the guys that when they make moves you will see the large scale ripple effects throughout the price of the commodity in question.

Be aware by the time you get this data it is at least a week old and large speculators and commercials can and do change positions quickly!

Tomorrow we get to analyze the latest COT Report, stay tuned!

HOW TO USE THE COT REPORTS

Despite what you may have read from other traders (people who only looked at it for a few years), it is not a black-and-white situation.  Just because the Commercials, the largest players in the marketplace, have been buyers does not mean a market will rally.  How can that be true?

Let’s say you are a Commercial in Sugar. You need sugar to make candy. If the price of Sugar goes down; you will buy Sugar. In fact the more it declines, the more sugar you will buy in the futures markets now, for delivery later on when you will be making candy.

Your main concern is how much the sugar in your candy costs. As a Commercial you don’t care much about what price will do… no… you care about buying so you can take delivery and whip of a bunch of Taffy to sell for a profit.

To be continued, stay tuned!

What the COT Reports tell you

The largest powers in the marketplace are the Commercials. These are the large users and producers of the commodity. They do not use the commodity markets to speculate or directly make money in the markets. They are producers and users of the commodity, so they sell forward or hedge their production/demand. They use the markets for selling and delivery, not speculating.

The Large Traders are the second most dominant figure in the report. These are not quite what you think. They're not just large traders like some of us. They are nowadays, for the most part, commodity funds that are trying to speculate directly in the market.

Finally, there are the small traders, probably people like you… people who are trading in smaller amounts; the average trader. Interestingly enough, sometimes their record is very good in specific markets, but, usually they are wrong.

Tomorrow we explain how to use this information.

This week we get to understand a very important part of Trading - COT Reports. Each day I'll post further information and on Friday we're going to look at the latest Reports and analyze them!

What is COT Report and how to use it to your advantage in trading?

The Commitments of Traders reports are released at 3:30 p.m. Eastern time. The Futures Only reports and Futures and Options Combined reports are usually released on Friday. The release usually includes data from the previous Tuesday. What it does is break down the amount of buying and selling done by three groups: Commercials, Large Traders, and Small Traders.

In other words, you really can find out each week exactly what the big guys have been doing in the marketplace... but it's not quite that easy. Tomorrow we explain why.
Stay tuned!

How easy it is to invest in gold?

There are several options open to investors who wish to invest in gold, either directly or indirectly. They include: gold bars and coins, gold mining stocks, gold funds, exchange traded funds, gold certificates and gold accounts to name just a few.

Know what you trade:

Gold is a rare metallic element with a melting point of 1064 degrees centigrade and a boiling point of 2808 degrees centigrade. Its chemical symbol, Au, is short for the Latin word for gold, 'Aurum', which literally means 'Glowing Dawn'. It has several properties that have made it very useful to mankind over the years, notably its excellent conductive properties and its inability to react with water or oxygen.