It Could Finally Be Time For Gold To Really Shine
This is a syndicated repost courtesy of The Felder Report. To view original, click here. Reposted with permission.
Over the summer I noted that gold, after a great run during the first half of the year, was running into important long-term resistance. A few weeks later, in a conversation with Grant Williams for RealVision, I noted that sentiment in gold had also gotten far too euphoric. The precious metal needed a pullback before it would be able to embark on its next leg higher.
To be clear, I still believe gold has started a new bull market. Furthermore, the case for owning gold has not diminished because of Donald Trump’s election victory. If anything, it has strengthened. The prospect of rising deficits and inflation enhance the bullish case for owning gold, especially when you consider the fact that the Fed, or any other central bank for that matter, is not likely to change dramatically from its incredibly dovish biasany time soon.
And thanks to the ‘Trump Triumph Trade,’ we have now seen a healthy pullback in gold accompanied by a complete shift in sentiment. Outflows from the gold ETF have persisted every day for nearly three straight weeks since the election. Headlineshave become very bearish again, similar to what we saw as gold bottomed late last year. From a contrarian standpoint this is all very constructive.
This post was published at Examiner by Jesse Felder ‘ December 2, 2016.