It feels as though we have been writing about this subject ad nauseam over the last few months.
While the bottom is taking longer that we anticipated, as seems to be the usual course of events, the final bottom now appears in place or imminent near the $1255 level.
The pattern that has unfolded is a large 5 year consolidation pattern that suggests much higher prices should it break out above $1380.
Perhaps more interesting is the chart of GDX, the gold miners ETF, which shows the narrowest Bollinger Band range in its history. As a reminder to the reader, the settings used on the chart encompass 2 standard deviations of price movement or to put it another way, 95% of price action.
The significance of this tight squeezing will be an explosive move once GDX is triggered by some event. While we can speculate what event that might be, we will not know until it occurs.
How long will this take to trigger? That is the million dollar question. Given the tight contraction of the Bollinger Bands, we anticipate a large move within the next 4 to 6 weeks, possibly much sooner.
We now anticipate that all the central bank and private gold purchases that have accumulated physical gold in Asia (China, Russia, India, Turkey come to mind), will shortly overwhelm the paper gold shell game that occurs in London and New York. Hence, an explosive covering of short gold and gold mining positions. We currently are watching last week's high on GDX at 22.34 to trigger the big move.
While the bottom is taking longer that we anticipated, as seems to be the usual course of events, the final bottom now appears in place or imminent near the $1255 level.
The pattern that has unfolded is a large 5 year consolidation pattern that suggests much higher prices should it break out above $1380.
Perhaps more interesting is the chart of GDX, the gold miners ETF, which shows the narrowest Bollinger Band range in its history. As a reminder to the reader, the settings used on the chart encompass 2 standard deviations of price movement or to put it another way, 95% of price action.
The significance of this tight squeezing will be an explosive move once GDX is triggered by some event. While we can speculate what event that might be, we will not know until it occurs.
How long will this take to trigger? That is the million dollar question. Given the tight contraction of the Bollinger Bands, we anticipate a large move within the next 4 to 6 weeks, possibly much sooner.
We now anticipate that all the central bank and private gold purchases that have accumulated physical gold in Asia (China, Russia, India, Turkey come to mind), will shortly overwhelm the paper gold shell game that occurs in London and New York. Hence, an explosive covering of short gold and gold mining positions. We currently are watching last week's high on GDX at 22.34 to trigger the big move.
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