| Basically, USD recent low was made as a 5-th wave from the most recent high. Similarly, gold rallied to above 355.70 in a 5-th wave high. I think EW is more like art than anything rigorous, but combined with hugely overbought stochastics and a record large commercials position in gold, with all gold commentaries bullish, I naturally doubt gold will move much higher, and will have a setback. Now, in 1993 gold bull market when COT reached above 100,000 contracts record short, gold declined $63 very quickly, in about a month. Silver also recently dropped like a stone from $5 to $4.20 on a record negative COT. WGC reports investment demand for physical gold is still virtually nonexistent, while jewelry demand dropped, although recovered somewhat. Jewelry+industrial demand (98% of total gold demand) is very price sensitive, so I expect a huge fall in demand for gold due to price rise, if the dollar does not fall, and the dollar did not fall enough for gold to rise to 360. I don't believe in EW BS that gold is going to 252, but we'll see. The drop from this type of COT may be swift and large in magnitude, but it for sure will be short lived. |
