Gold confirmed a new bull market in June 2019. The current cycle likely peaked last week after surging nearly $300 since May. Next, we should get a multi-week correction into October/November and perhaps a backtest of the breakout area surrounding $1380.
COMMITMENT OF TRADERS: The commercials (smart money) are positioned heavily against gold at -337,741 contracts. It will take several weeks to unwind that position. A 50% reduction in net-shorts seems reasonable before gold carves out the next bottom.
GOLD WEEKLY CHART: The initial breakout in gold rallied to resistance. The cycle likely peaked last week, and I expect a multi-week correction. A pullback to the breakout area between $1360 – $1380 would present, in my opinion, the last great buying opportunity. Over the next year or two, gold should grind its way higher to test and then ultimately breakout above the $1923 high set in 2011.
Governments are beginning to realize quantitative easing didn’t work. Negative interest rates are turning financial models on their head. The next step will be debt monetization and currency depreciation – the perfect environment for gold. Consequently, we may be approaching one of the last great buying opportunities.