Gold Nearing Breakout into Unprecedented Bullmarket and the Latest Cots Won’t Stop It…
By: Clive Maund
GoldSeek.com
Friday, 14 June 2019
All the pieces are falling into place for the biggest gold bullmarket in history and by the look of the long-term gold chart, it is set to start very soon. The biggest reason of course is the accelerating demise of fiat. There are many other reasons that we will be considering going forward, but the one that looks set to trigger the immediate start of the bullmarket (and has already since the move of the past 2 weeks is viewed as the initial impulse wave of this bullmarket, even though it hasn’t broken out yet) is the Fed chickening out of its “normalization” program, which was a joke anyway because there is no way they can normalize the hopeless mess they have created. . The markets called the Fed’s bluff and they very quickly folded, establishing that they are now powerless.
A key point to make at this juncture is that the latest COTs for gold looked bearish because there was an explosion in Commercial short and Large Sec long positions to an at least 1-year peak, which many are taking to mean that gold will fail again at the big resistance at the upper boundary of its huge base pattern. But what may instead happen this time is that gold breaks out anyway, perhaps after backing off a little first, and rockets higher, with positions ballooning to well off the scale levels, which would hardly be surprising since if gold breaks out above $1400 a huge number of investors and traders will come down off the fence and pile in. When they have reached wild extremes on a spike, then we will see a correction or at least a consolidation before the next upwave starts. We have learnt from a mistake made early in 2016 when we called the end to the strong rally in progress then off the lows of the giant complex Head-and-Shoulders pattern too early due to high Commercial short and Large Sec long positions.
The main purpose of this update is to emphasize two crucial points. One is that the sharp rally in the Precious Metals over the past 2 weeks is considered to be the start of a “breakout drive” that will soon bust gold through the key resistance towards and at $1400, a development that will probably trigger a spectacular spike. The other is that the seemingly bearish looking COTs won’t stop it – there be a minor short-term reaction but other than that gold is looking set to blast higher soon. It’s hard to see how it wouldn’t with the Fed’s reversal to dropping rates set to rip the rug out from under the dollar, and the global move to dedollarize given added urgency by the recent spate of bullying and crude threats issued to the rest of the world from the US in the form of sanctions, tariffs and possible military. The US Neocons would do well to heed the old saying “People who live in glasshouses shouldn’t throw stones” – the key to neutralizing them is to dedollarize, collapse the dollar and starve the US military – industrial complex of the torrent of foreign funds that it depends on for its power. The rest of the world knows this and, after making sure that they are able to defend themselves militarily (in the case of the major powers), are taking steps to dump the dollar and push it off its perch. This of course will be a huge driver for gold, especially as most other currencies are also in a parlous state.
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