Thursday, July 9, 2015

Gold Is Trying To Break Up Against World Equties

I know. Gold, silver and everything what has something to do with these metals, look just terrible. Who knows, maybe the whole sector is going to go lower. But let us face facts. At least facts, which are valid today.
The chart below shows the gold's relative strength against world equities (represented by $DJW - see my last post):

As the chart shows, after four-month consolidation, gold is trying to break up against world equities. Simply put, world equities look much worse than gold, which favors this metal. Additionally, looking at the upper chart one can spot another technical formation emerging- triple bottom in gold prices.

Add to that the highest short positions in gold and silver held by the so-called Managed Money and we have quite perfect situation for the whole precious metals sector to surprise most of the market players.

Silver - short positions held by Managed Money:

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