Gold Correction Finally Arrives?
Nothing goes straight up forever. It looks to us that gold is finally cooling off after a $250 rise off the December bottom
Gold Correction Finally Arrives?
Nothing goes straight up forever. It looks to us that gold is finally cooling off after a $250 rise off the December bottom. Commentators will say it's the downbeat news from China but that's likely just the excuse gold needed to correct an overbought condition.
Last Friday, after the poor U.S. jobs report, gold popped to the upside as expected, but despite enormous volumes it failed to breach $1300 and fell back. The U.S. dollar declined on the jobs news, also as expected, but then recovered. COMEX Open Interest has grown extremely rapidly with only minor gains in the gold price. Hedge funds are positioned with record longs on COMEX and they have notorious trigger fingers when their profits are threatened. All considered, it's probably time for a correction, in our view. However, we believe we are in a new gold bull market so dips in our opinion represent buying opportunities.