Bullion sentiment, already in the doldrums has managed to sink even lower following the recent new collapse in the asset class.
The latest report from the commitment of traders will make interesting reading later today as will the JPM physical position, no doubt.
But even the sentiment is now so low I would guess few will even read the latest report. Only the professionals are still interested in these sort of data points. Private investors, whilst not active sellers here have given up trying to pick bottoms in this 2 year bullion bear market and this fact alone starts to get me interested from a contrarian perspective.
Here the latest tech report offering little more than a near term consolidation with lower targets in play.
BullionWeeklyTechnicals25062013
On the near term there is a trade long to take gold back to the 1320 or so level. Other than this there is little medium term to technically suggest a successful trade to the long side. She is also very oversold so a trade for a continuation of the cyclical bear looks dangerous to me as whip lash could be painful.
On the macro side either extreme of news flow would be supportive for gold. Ie a breakdown in the US recovery and financial system would be supportive but also so would a rapid re-inflationary scenario or much more dovish news flow from the FED. Given the combination of factors here some bounce seems a reasonable prob trade (also for the gdx miners) though not a medium term trade due to the lack of tech and macro support, for the moment. The USD also remains the cleanest dirty shirt shich is another generally bearish factor. Hawkish monetary expectations are now priced in to the asset class so on the reversal sentiment re this tightening the bounce would be supported, though likely not in the medium term.
All the best
Rich
(4 votes, average: 5.00 out of 5)
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