The NEM Lead Indicator Is Very Bullish and the COT Data is Bullish Short Term

NEM outperformed the XAU by a very wide margin of +1.63% today, which means continued upside surprise short term, or at least modest downside, is likely.

The COT data http://www.cftc.gov/dea/options/deacmxsof.htm is short term bullish because of the unusually large (> 10% decrease in long position) degree of long liquidation for both gold and silver by the non contrarian Commercial Traders. The gold Commercial Traders sold an unusually large -16,486 long futures/options contracts which correctly portended short term strength but added a very modest short 206 futures/options contracts which portends some very modest weakness this week. With silver the picture is more bullish because in addition to the unusually large long liquidation the Commercial Traders covered 822 futures/options contracts which also portends strength. Keep in mind that this COT data is as of last Tuesday 11-22, so much of these indications are factored in already.