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loving the hatedhttp://secularinvestor.com/gold-hate-bullish-become/12021/?utm_source=feedly&utm_medium=rss&utm_campaign=gold-hate-bullish-become Gold-- the more hate, the more bullish we become [excerpts] -- After gold’s breakdown on Sunday July 20th, we have seen an avalanche of negative commentaries. Admittedly, from a chart perspective the breakdown does not bode well. We have to get that straight. The technical breakdown is going to lead the price of gold in US dollar terms towards $1,000 /oz, potentially lower. But if we compare this breakdown in gold with the one in April and June of 2013, we would say the one from last week is a small dip on the long term chart while the one of 2013 was a real collapse. However, the negativity that was triggered by the latest small price drop is much stronger. -- Let’s face it. Markets can become extreme, but markets do not remain endlessly at extreme levels. They also do not trade endlessly in one and the same direction. Along the same lines, sentiment as measured by statistical methods is simply confirming what we see in the news headlines. Sentimentrader’s optimism index for gold stands at 12 on a scale from 1 to 100 (the latter being the highest value). And guess what, gold has currently the lowest reading from all assets (including currencies, commodities, stock market sectors). The bullish percent index for gold miners, which measures the number of stocks in a bullish trend, is standing at zero. The sentiment surrounding gold can’t (almost) get worse. But if ‘everyone’ is bearish, and there are no more sellers left to sell, what will take place in such an environment? Indeed, buyers will pop up. -- We believe those ‘smartest’ participants are the commercial traders in the COMEX futures market. Please note that we do not promote COMEX, as we firmly disagree with the way COMEX works (price discovery in gold is meaningless given the futures market). But the positions of market participants at COMEX provides interesting insights. Today, we see that commercial traders are writing history: they hold the smallest net short position ever (since the COT report has been published in 2006). In other words, they are positioned for a rally. And they are doing so right at the time the mainstream media is screaming that “no one wants gold.” |
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Msg # | Subject | Author | Recs | Date Posted |
152185 | Re: loving the hated | fair_say | 2 | 8/2/2015 11:07:44 AM |
152186 | Re: loving the hated | cluelessmeetoo | 0 | 8/2/2015 12:39:38 PM |