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Adam Hamilton: Commitment of traders reports don't fully tell the tale

Section: Daily Dispatches

9:15a CT Sunday, October 11, 2009

Dear Friend of GATA and Gold:

Adam Hamilton, publisher of the ZEAL Intelligence letter, argues in commentary published Friday that the commitment of traders reports for gold trading on the U.S. commodity exchanges do not determine price direction as much as the constant analysis of them suggests.

Record commercial short positions in gold, Hamilton writes, often have failed to precede declines in price. Hamilton also suspects that the U.S. Commodity Futures Trading Commission, which publishes the commitment of traders data, is not terribly accurate in defining commercial shorts.

Further, quite apart from Hamilton's commentary, one does not need to be wearing one's tinfoil hat to wonder if the big market players counted by the CFTC as commercial shorts on the U.S. exchanges might be hedging their positions there with unreported purchases elsewhere. Gold trading around the world is far from transparent.

After all, if, say, JPMorganChase, as agent for the Federal Reserve, had been instructed to start covering and to beat a retreat to a higher surreptitious ceiling for the gold price, the Fed and the company well might want to avoid creating a public record of it early enough that long traders could take advantage of it and take possession of cheap gold. And in this new era of infinite money and pervasive government secrecy, how much credence should be attached to the records and reports of U.S. government agencies anyway? From the detailed plan of currency and gold market manipulation written by the Federal Reserve in April 1961 and still posted on the Internet site of the Federal Reserve Bank of St. Louis (see, we know that the U.S. government has at least contemplated the falsification of currency and gold market records for 50 years.

Hamilton's commentary is headlined "Gold Futures CoT 3" and you can find it at the ZEAL Intelligence Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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