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 Msg. #  Subject Posted by    Board    Date   
03540 Re: Is the gold rally the real deal?
   decomp ...it's real, but there are folks out there who want us peasan... 		ribit   POPE IV   09 Feb 2016
 10:38 PM
03531 Re: Is the gold rally the real deal?
   On CNBC this morning they said that gold will go up to $1,800 soon... 		DGpeddler   POPE IV   09 Feb 2016
 9:42 PM

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Is the gold rally the real deal?

By: Decomposed in POPE IV
Tue, 09 Feb 16 7:59 PM
Msg. 03523 of 47202
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Is the gold rally the real deal or ‘fool's gold’?

Published: Feb 8, 2016

By SIMON MAIERHOFER
Marketwatch.com

Gold is the rally nobody is talking about. Without much fanfare, gold prices climbed over 14% since their Dec. 3, 2015, low.
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Fourteen percent may not sound like much, but in the land of the blind, the one-eyed man is king. In a land of steep losses (ruled by short ETFs), gold is by far the best-performing asset class year-to-date.

This must come as a surprise, at least to the “pros” who got the media to spread their doom-and-gloom gold gospel right as prices bottomed (timing shown in chart below): Here's a small selection of headlines:


Kitco: "No Reason To Hold Gold In 2016; Prices To Drop Below $1,000" – Dec. 3, 2015
CNBC: "It's going to get much worse for gold" – Dec. 4, 2015
Bloomberg: "Gold Gets Next Slam as Assets in Top ETP Tumble Most Since 2011" – Dec. 2, 2013

Contrary to the public gold fear mongering, the Profit Radar Report had been waiting for a tradable low in the 1,100 - 1,050 range. Gold slightly exceeded the ideal down side target, but the December 2, 2015 Profit Radar Report stated that: "There are three different bullish RSI divergences. The odds of a bounce increase with every tic lower. Hedgers decreased their short exposure further, which should bode well for prices."

As the gold chart shows, trade busted above resistance in late January and hasn't looked back since.

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What does this mean?

Short-term gold considerations

Gold has been overbought for a few days, but continues to rally. That's good news long-term. Investors are piling back into gold ETFs like the SPCR Gold Shares and Market Vectors Gold Miners.

However, last year, gold also rallied 15% (from November-January) and rolled over in late January. Although the downside risk is significantly less this time around, the reason for last year's decline should still translate into a pullback this time around as well.

Next resistance starts around 1,205.

Long-term gold considerations

Gold lost 45% of its value from September 2011 to December 2015. At the December 2015 low, some sentiment indicators reached extremes not seen in years, even decades. The Nov. 30, 2015, Profit Radar Report published the chart below, which plots the price of gold against commercial hedgers' short exposure.

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Just before the December low, commercial hedgers (considered the smart money) were the most bullish they've been in 10 years. It rarely pays to bet against the real gold pros. Based on gold's price history, and the scope of sentiment extremes at the low, further up side is probable.

The risk of a short-term pullback is increasing (watch support at 1,170, 1,145 and 1,115), but gold's performance since the December low suggests further gains and validates a “buy the dip” approach.

http://www.marketwatch.com/story/is-the-gold-rally-the-real-deal-or-fools-gold-2016-02-08?dist=beforebell


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Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months