"King World News and Marc Faber both draw attention to commercial hedgers of gold having the smallest short exposure to gold and silver since 2001. Assuming my summary of the comments is correct, have you or any other subscribers seen reports of this? If so, is this a bullish signal for gold and silver?"

Eoin Treacy's view Thank you for this question and these links which may be of interest to subscribers. I suspect that both Eric King and Marc Faber are looking at the CFTC CMX Gold Net Commercial Combined Positions Index. This spread hit an historically large short position near -325000 ounces in 2010 and has tightened of late as gold miners unwound their hedge short positions.

From what I see in the above interviews, a correlation is being drawn between a net long position among gold miners in 2001 and the beginning of the gold bull market. However, if we simply look at more back history, the fact is that commercials were net long of gold for most of the last 1990s without it having a meaningful effect on prices.

The logical course of action for gold miners presented with a tough operating environment and a cost of production that has ballooned over the last decade is to increase hedges. This suggests that the surge in the above spread witnessed this year is unlikely to continue.

This article from Forbes mentions that UK listed Petropavlosk is now “ hedging half of its second quarter 2014 production at $1,408 an ounce”. The share has lost downward momentum over the last few months, not least as gold has fallen through $1400.

Gold ETFs went from a negligible segment of the global market in 2002 to one of the top five holders on aggregate by last year. As such the actions of ETF holders are now one of the most important determinants of how gold prices perform. Total holdings have fallen from 84.6 million ounces to 67.3 million ounces to date this year. That is the equivalent of 541 tonnes. Until the Index demonstrates that a bottom has been found, sentiment towards gold is likely to remain ambivalent.

Gold remains quite oversold relative to the 200-day MA but a break in the progression of lower rally highs will be required to stem the decline and suggest a return to demand dominance beyond the short term.