Dear Steemit friends,
Unfortunately, gold price lost about 2.5% in the last two weeks. Is there any hope for a relatively strong rally pretty soon?
I think there is.
Consider the chart below, it shows net long positions by the speculators (dumb money). Usually, speculators have greater long positions near the price tops, as the preceding rally has given them confidence to buy. Usually, speculators have smaller long positions near the price bottoms, as they despair and sell in the preceding decline.
During the last four bottoms in the last year and a half, the smaller long positions of the speculators were 96, 65, and 108 (in 1000s of contracts). During the same period, the larger long positions near the tops were above 250. Currently, the speculative net long position is 89. One can argue that this size of the long position is much closer to the price bottom that to the price top. Therefore, I expect a strong rally into at least $1360 over the next couple of months.
What do you guys think of the gold price over the next 2 - 3 months? Share your opinion in the comments, and I will be glad to upvote the meaningful ones.
