In the December 19 session on the TOCOM Goldman Sachs SOLD 21 long contracts which brings their long position to 1,316 contracts and makes them NET LONG 821 contracts.
Cheers
Adrian...

Bill,

I have updated the chart of the Goldman Sachs short position. This position peaked at 52,000 contracts net short in May of 2006 (52 tonnes of gold). The trend has been declining ever since such that today their net short has become a NET LONG position of 842 contracts (0.84 tonnes). This is their largest net long position they have held since I have been keeping track of their positions which is almost 3 years. Goldman Sachs has only been net long on 6 days out of 722 trading days! The way that this position has been steadily reduced is indicative of Goldman Sachs knowing that the profitable days of being net short in gold are over and that the only game in town is to be net long. I estimate this TOCOM account has so far lost GS $180 Million.

Goldman is not alone in reducing its net short position. The traditional TOCOM large shorts have all reduced their net short position:

As can be seen the largest traditional shorts on the TOCOM saw it as a real emergency to cover shorts since the credit crisis cranked into high gear in July 2008.

The major traditional gold shorts leaving the short side of the gold market makes Rothschild’s decision to quit the London Gold Fix in 2004 rather prescient. They had been a member of the London Gold Fix since 1919 but in 2004 decided they wanted no further part of it. The Rothschild’s are probably the smartest and most well informed of all the investment houses and always keep a low profile. Interestingly AIG also resigned form the London Fix in 2004 but unfortunately for them they didn’t leave the derivatives market also!

The common theme is that many important players who have made millions in being either suppliers of gold to the market or playing the short side have got out of the market or reduced shorts, or have become net long. This is NOT a coincidence. When such substantial investment houses have been on the gold supply or short side for decades and then switch sides it is not based on speculation but knowledge. It all points to gold making significant moves to the upside. For such a premeditated MASSIVE exodus of the key short side players one can only speculate that the coming upside move will be truly awe inspiring!
Cheers
Adrian