By now you probably already know that I am a long-term gold bull and that I believe gold is forming a major bottom which could push the price much higher in the future. This year the price has steadily been moving higher as expected and suggested many times, but is now in danger of a long liquidation!

I mentioned COT positioning a few times already and it seems hedge funds got ahead of the market a bit and established a near record long position, while producers are still not believing in this move just yet. Capture
One can see a very similar picture in silver positioning.

The price is just now trying to close below $1300 level and if it doesn’t recover very quickly above this crucial level then there is a risk of a long liquidation by funds which could take the price down to somewhere between $1220 and 1240 level. Spot Gold (DFB)
Confirmation would be a daily close below $1295.

For a short-term play this could be looked as a good short opportunity, but on the other hand on a more longer term horizon this “dip”, if it happens, should provide a great long-term buy entry!

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  1. […] Is the dollar about to turn just when everyone got excited with their shorts? We’ve seen an amazing selloff in the last couple of months, and while I still believe we are in the beginning of a major bear market [please see more here], I would not be surprised if we see a corrective rally from the current levels. This would also fit well into gold story discussed in the last post. […]

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  2. […] Is the dollar about to turn just when everyone got excited with their shorts? We’ve seen an amazing selloff in the last couple of months, and while I still believe we are in the beginning of a major bear market [please see more here], I would not be surprised if we see a corrective rally from the current levels. This would also fit well into gold story discussed in the last post. […]

    Reply

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