Author Aleksandar Adamovic
We pointed out that Gold was starting to show signs of life a few days ago, and recently we also showed how gold and gold miners (GDX US) have moved higher after every time the Fed has raised rates over past seven Fed hikes.
This time we had to wait a bit, but gold finally made the big move last week. We saw this move continue higher today, despite equity markets actually calmer. Gold has been trading very muted for a long time, so one should not expect a possible gold bull to go up in a straight line. Note we traded up today and retraced some intraday as we saw the shiny metal hit the 100-day average.
Much of last price moves in various financial instruments has according to us been an effect of pure extreme positioning, let it be equities, volatility or gold.
Latest stats from CFTC shows the same has occurred in gold. Just prior to this last sharp move higher, gold net non-commercial futures were even more increased, despite having been at a rather extreme short level. This last move higher has certainly been a painful trade for shorts in gold.
The gold miner ETF, GDX US, has been on fire. We have seen single names put in impressive spikes higher, as well as the overall ETF, has continued climbing higher. Note the quick intraday spike touching the 100-day average.
If gold is fundamentally about to go much higher we leave to pundits to decide, but just as we have been reasoning around other assets, the last move higher in gold has been against recent extreme positioning.