GoldFact. Did you know: The world's largest gold bar weighs 250 kilograms (551 pounds). The bar obtained an official Guinness record certificate for "The largest manufactured pure gold bar". It is stored in the Toi Gold Museum in Japan. Today's worth of the bar is $10,000,000.

#Gold today. After it touched the $1215 mark as predicted in the previous post, Gold is now faced with the next challenge - a break above $1225. Charts are as follows: 4h, equidistant channel; 4h MVA, RSI, MACD; 1d MVA, Fibonacci, equidistant channel, Andrew's Pitchfork. Today's FOMC could stir the market, if you're in, make sure you have your stops wisely placed.

#Gold hourly. Get ready for a break-out. Tgt1 $1215; Tgt2 $1225;

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.