If you hear one peep out of the gold community about a precious metals “takedown”, “attack” or any other such aggressive or war-like language you will then be hearing some old fashioned and promotional gold bug orthodoxy. Fortunately, a casual look around the Bug-o-Sphere does not yield too many obvious conspiracy theorists or importantly, cheerleaders.
Indeed, it seems that all too many bugs expected this correction in gold, silver and the miners. That is a good thing because when the real top comes these ladies are going to be out front and greed will be running rampant (quite possibly against a negative fundamental or valuation backdrop as in 2008).
Instead, everybody, it seems knew about the high-risk Commitments of Traders situation for gold and silver. The CoT is not a timer, but for weeks now it had been a condition that’s been in place for a correction. It’s not a “takedown”, it’s a condition of too much speculation that had to be addressed. Now it is. Other CoT data available here.
As the CoT, Hulbert’s HGNSI and the extreme overbought readings first in the gold price, but then dynamically in the silver price and the miners gathered to form a high-risk situation, the time to take some profits was over the last couple of weeks, not now. Gold oriented newsletters appear to have jerked over bullish with the latest head-fake rise in the gold price. Continue reading "Precious Metals Were Ripe For A Pullback"