{"id":34349,"date":"2016-06-04T23:42:04","date_gmt":"2016-06-05T06:42:04","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=34349"},"modified":"2016-06-04T23:46:04","modified_gmt":"2016-06-05T06:46:04","slug":"a-blow-off-top-for-gold-not-quite-yet","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2016\/06\/04\/a-blow-off-top-for-gold-not-quite-yet\/","title":{"rendered":"A Blow-Off Top for Gold? Not Quite Yet&#8230;"},"content":{"rendered":"<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on May 8, 2016. <a href=\"http:\/\/seekingalpha.com\/article\/3972705-blow-top-gold-lies-ahead\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>Speculators are now net long gold at levels that surpass the financial crisis of 2008\/2009 and the major 2011 peak in gold prices.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34353\" aria-describedby=\"caption-attachment-34353\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAU_USD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAU_USD.png\" alt=\"Last week net non-commercial positions in gold soared from 220,857 to 271,648. This is a level unseen since at least the financial crisis (the yellow line represents gold)\" width=\"550\" height=\"550\" class=\"size-full wp-image-34353\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAU_USD.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAU_USD-150x150.png 150w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAU_USD-300x300.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34353\" class=\"wp-caption-text\">Last week net non-commercial positions in gold soared from 220,857 to 271,648. This is a level unseen since at least the financial crisis (the yellow line represents gold)<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"https:\/\/www.oanda.com\/forex-trading\/analysis\/commitments-of-traders\" target=\"_blank\">Oanda&#8217;s CFTC&#8217;s Commitments of Traders<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Given this surge, I expected to see a fresh, major run-up in SPDR Gold Shares (GLD). Instead, GLD spent most of the week rolling back some of the breakout that occurred at the end of April.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34354\" aria-describedby=\"caption-attachment-34354\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GLD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GLD.png\" alt=\"SPDR Gold Shares (GLD) hit a new 15-month high in April on a major breakout. The momentum cooled off a bit from there....\" width=\"550\" height=\"375\" class=\"size-full wp-image-34354\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GLD.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GLD-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34354\" class=\"wp-caption-text\">SPDR Gold Shares (GLD) hit a new 15-month high in April on a major breakout. The momentum cooled off a bit from there&#8230;.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.freestockcharts.com\/platform\/v1\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Next, I turned to my favorite indicator of gold sentiment: Google Trends. {snip}<\/p>\n<p><center><br \/>\n<a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold.png\" alt=\"Sentiment on &quot;buy gold&quot; has stayed quiet this year\" width=\"550\" height=\"294\" class=\"alignnone size-full wp-image-34357\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold-300x160.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><\/p>\n<p><figure id=\"attachment_34356\" aria-describedby=\"caption-attachment-34356\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold-monthly.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold-monthly.png\" alt=\"For perspective, the monthly view of Google Trends for &quot;buy gold&quot;\" width=\"550\" height=\"292\" class=\"size-full wp-image-34356\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold-monthly.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160507_GoogleTrendsBuyGold-monthly-300x159.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34356\" class=\"wp-caption-text\">For perspective, the monthly view of Google Trends for &#8220;buy gold&#8221;<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"https:\/\/www.google.com\/trends\/explore#q=buy%20gold\" target=\"_blank\">Google Trends<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Although Google Trends has not responded to the current trading extremes for gold, I fully expect a response in due time. {snip}<\/p>\n<p>One reason gold buyers have remained bold is the waning credibility of the Fed on &#8220;rate normalization.&#8221; For many months now, the 30-Day Fed Fund futures have mostly left odds for the next rate hike late in 2006, sometimes off into 2017. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34346\" aria-describedby=\"caption-attachment-34346\" style=\"width: 473px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/30DayFedFundsFutures.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/30DayFedFundsFutures.png\" alt=\"The odds for the next rate hike are higher for December than the odds following the jobs report for March\" width=\"483\" height=\"295\" class=\"size-full wp-image-34346\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/30DayFedFundsFutures.png 483w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/30DayFedFundsFutures-300x183.png 300w\" sizes=\"auto, (max-width: 483px) 100vw, 483px\" \/><\/a><figcaption id=\"caption-attachment-34346\" class=\"wp-caption-text\">The odds for the next rate hike are higher for December than the odds following the jobs report for March<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.cmegroup.com\/trading\/interest-rates\/countdown-to-fomc.html\" target=\"_blank\">CME FedWatch Tool<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>The market&#8217;s skepticism about rate normalization has also come through in the persistent slide in the U.S. dollar (UUP). {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34345\" aria-describedby=\"caption-attachment-34345\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_DXY0.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_DXY0.png\" alt=\"The U.S. dollar index may have hit rock bottom for now.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34345\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_DXY0.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_DXY0-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34345\" class=\"wp-caption-text\">The U.S. dollar index may have hit rock bottom for now.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.freestockcharts.com\/platform\/v1\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Trader confidence in the dollar&#8217;s decline has come through in <a href=\"http:\/\/drduru.com\/onetwentytwo\/2016\/04\/23\/forex-critical-trader-confidence-continues-to-grow\/\" target=\"_blank\">the near one-way bets against the dollar across most major currencies<\/a>. Recently, however, I have seen hints that <a href=\"http:\/\/drduru.com\/onetwentytwo\/2016\/05\/03\/japanese-yen-maximum-bullishness-meets-maximum-search-interest-a-fever-ready-to-break\/\" target=\"_blank\">a great unwind may be looming for the Japanese yen<\/a> (FXY) and <a href=\"http:\/\/drduru.com\/onetwentytwo\/2016\/05\/02\/australian-dollar-sinks-with-rba-rate-cut\/\" target=\"_blank\">the Australian dollar<\/a> (FXA) {snip}<\/p>\n<p>Overall, my trading approach on gold remains the same. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34360\" aria-describedby=\"caption-attachment-34360\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GDX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GDX.png\" alt=\"The VanEck Vectors Gold Miners ETF (GDX) has been on fire in 2016 with an 83% year-to-date gain\" width=\"550\" height=\"375\" class=\"size-full wp-image-34360\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GDX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_GDX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34360\" class=\"wp-caption-text\">The VanEck Vectors Gold Miners ETF (GDX) has been on fire in 2016 with an 83% year-to-date gain<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.freestockcharts.com\/platform\/v1\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>I also dabbled in silver which I saw as itching to catch-up to gold&#8217;s run. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34363\" aria-describedby=\"caption-attachment-34363\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAG_USD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAG_USD.png\" alt=\"Silver (the yellow line) finally seems to be bottoming after traders have ramped up net long bets multiple times in the past 16 months.\" width=\"550\" height=\"550\" class=\"size-full wp-image-34363\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAG_USD.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAG_USD-150x150.png 150w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160506_cot-XAG_USD-300x300.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34363\" class=\"wp-caption-text\">Silver (the yellow line) finally seems to be bottoming after traders have ramped up net long bets multiple times in the past 16 months.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.cmegroup.com\/trading\/interest-rates\/countdown-to-fomc.html\" target=\"_blank\">CME FedWatch Tool<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: long GLD, long and short various currencies versus the U.S. dollar<\/p>\n<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on May 8, 2016. <a href=\"http:\/\/seekingalpha.com\/article\/3972705-blow-top-gold-lies-ahead\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This is an excerpt from an article I originally published on Seeking Alpha on May 8, 2016. Click here to read the entire piece.) Speculators are now net long gold at levels that surpass the financial crisis of 2008\/2009 and the major 2011 peak in gold prices. Source: Oanda&#8217;s CFTC&#8217;s Commitments of Traders Given this &#8230; <a title=\"A Blow-Off Top for Gold? Not Quite Yet&#8230;\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2016\/06\/04\/a-blow-off-top-for-gold-not-quite-yet\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[199,58,20,21],"tags":[1713,1688,299,200,24,1164,25,354,1591],"class_list":["post-34349","post","type-post","status-publish","format-standard","hentry","category-commodities","category-federal-reserve","category-forex","category-u-s-dollar","tag-30-day-fed-fund-futures","tag-cftc","tag-dxy0","tag-gld","tag-gold","tag-google-trends","tag-silver","tag-slv","tag-u-s-dollar"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>A Blow-Off Top for Gold? 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