Final Thoughts on Gold

You may have read all sorts of explanations on gold's collapse on the Internet; fears of margin hikes in China, chatter  that Italy (4^th largest owner of gold) may start selling reserves; Fed selling GLD naked shorts in order to rebalance the 50-1 ratio of Buyers-Sellers of bullion; and violent unwinding of the short yen/long risk assets trade leading to gold liquidation. Last week we warned about the sharp drop in the Gold/S&P500 ratio, which today has reached a 5-year low. The big question now emerges as to where gold will go. 1350 has proven to be the 30% peak to trough decline, referred to in previous webinars and to our Premium subscribers. Today's bounce may lift gold towards 1400s but so far the indications suggest gold will revisit 1350s and may have the dynamics to extend further down to 1290s.  Our bearish stance of the past 3 months has been mainly backed by multi-time frame momentum measures, which we converted into recommendations for our Premium subscribers with varying success due to miscalculation of stops. More importantly, trading rationales were accompanied with each trade and shift in bias. There are also important developments in the Gold/Silver ratio and the extent to which silver may add to its losses. All of this as well as the trades on USDCAD ahead of tomorrow's important BoC meeting are in the latest Premium Insights.