We had a large sovereign order in the market at $1,380 (area). That was definitely filled today (Friday). What we have today is an even more stretched managed money position holding the bag.
This physical tonnage that is disappearing will have an affect on the paper market, and I think it’s going to have an affect fairly soon.
The short stops have moved significantly lower and are highly vulnerable.
The minute this (downside) momentum wanes, I think there will be a race (for the shorts) to cover. I would say, given that the physical market is exponentially larger (in terms of demand) on each decline, I still firmly believe the bottom is in at the $1,320 area. But if we start approaching that area again, I think anything sub $1,350 is going to create massive central bank demand.
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