while the XAU has not yet really confirmed the recent move in gold, i believe the bottom in the 270 area may in hindsight turn out to have been 'the' bottom...interestingly, the market vane bullish consensus percentage was lower at this higher bottom than it was when the PoG hit the 250's area last year. this is a phenomenon that can often be observed in a long drawn out bottoming process, that the secondary, higher bottom which serves as the actual launching pad for a new bull market is accompanied by more negative sentiment than the ultimate low that preceded it.
a good example would be the low in equities in 1982, and the famous 'the death of equities' BW cover that accompanied it. the fundamental situation for stocks had already turned for the better, with the peak in rates and inflation in, and yet no-one was yet prepared to quite believe that things had changed for good.
the same is true for gold and silver nowadays, we know that supply/demand fundamentals have become more favorable, with silver stock piles at a multi decade low, and CB selling of gold now a known quantity due to the Washington agreement, and yet, the 20-year bear market and the many false starts have conditioned us not to expect any durable change in the price trend.
of course the bottoming process could become even more complex, but it definitely DOES look like a bottoming process.
hb |
