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Reno Chris

Smart Money Bullish On Gold

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Commercial futures buyers in the gold market, are considered as the “smart money” in gold as they work in the industry as insiders - buyers for jewelry companies, etc.. They have an excellent track record of being right, and they are now the most bullish on gold that they have been in nearly five years.Last time they were this bullish was the market bottom in 2008 - and gold did very well after that.

 

Small futures speculators are considered the "dumb money" as they often are most optimistic buyers at market tops (when they should sell) and most pessimistic sellers at market bottoms (when they should buy). They are now the most pessimistic they have been since 2001 when gold was at $280 and making a long term bottom.

 

See: http://www.theglobeandmail.com/globe-investor/inside-the-market/smart-money-most-bullish-on-gold-in-five-years/article12165636/#dashboard/follows/

 

I also have access to a private indicator (not related to metals futures) that currently shows investor interest in gold is at very low levels.

 

All this points to a strong indication that gold will, in the long term be moving upward. It may stumble a bit more in the short run, but the long term outlook is very good in my opinion.

 

 

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All my gold stash is found so cost is near nothing in relation to todays prices. I mark all containers with pertinent info as to who,what,when and my cost of retrieval. That way I can pick and choose whether to sell a oz that cost me $100 or $10 a oz to procure. Maxes out profits and will never sell best a the best as protection for times of dollars demise or inflation hedge on worthless greenbacks. Besides fun to visit in the bank and remember a ill spent youth running the hills like a gold crazed maniac with other madmen-soooo cool B) --John

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Hi, friends,

 

Years ago, I considered myself to be an up-and-coming stock market maven.  Stock traders have a lot of sayings which are thrown about, and this one which I learned back then has application here. It goes like this, “If you want to know where the price of the commodity gold is headed, look at where the price of gold mining stocks has been.”  That is, gold mining stock prices are a leading indicator for significant price moves in the metal itself.  I have watched this to be true, and the last gold high price and subsequent move down is an example.

 

I’ve attached two screenshots for illustration:  a 5 year chart in the price of gold, and a 5 year chart in the price movement of ticket symbol XAU, an index representing the value of a basket of actively traded gold mining stock shares.  The XAU chart shows its high occurred in late 2010, whereas commodity gold hit its high 8 months later. By that time, XAU had performed a triple top of lower highs (very bearish), and its 50-day moving average was showing an obvious downtrend.

 

I don’t believe this pricing behavior is accurate for short term trading, but it’s the one I continue to watch nowadays for reliability.  Your mileage may vary.

 

Regards,
-C


 

 

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