Back on 11/22/15, I posted that although Gold remained in a longer term bear market, the metal
was worth your attention because of its oversold status and very bearish sentiment. Gold Price
Gold based out through year end 2015, and it has been in a strong seasonal rally this year which
has continued into Feb.
Gold fundamentals have shifted somewhat away from dead certain negative toward neutral.
US inflation momentum, measured on a yr/yr basis, may be bottoming currently, and the US
dollar, which has enjoyed a bull run to very overbought levels, has recently ebbed on speculation
the Fed is turning considerably more circumspect on how fast it will further tighten monetary
policy. Weaker stock prices on a global basis has also chilled confidence that financial upsets
can be avoided.
The rally in gold so far this year has been strong enough to break above intermediate term down
trend lines and has brought gold up to an important pivot point at 1200 oz. It has been a good
trade, but the market is now very overbought on a shorter term basis and the lift off has been
vertical enough to force traders into chasing the metal price up. $GOLD Daily
Given that gold has not been able to hold the 1200 price level for over a year now, it would not
be a surprise to see it back off and establish more solid footing before resuming the assault.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!