Has Gold Topped?

And another video from INO, this time on Gold.

Has Gold Topped Out for the Year? http://www.ino.com/i...mp;campaignid=3

Yes, I believe gold, and silver, have topped, for a while. Small specs gold longs open interest is high, typically an indication of a purging to ensue. Personally, I like shorting silver here, either tracking stock SLV, or the nearby Comex silver futures contract. Gold is at all time highs, while silver is around $16 an ounce, way way below its all time highs of 50. Since the "precious" metals bull move got started in earnest back in 2001, silver made it as high as the low twenties. Silver is much less liquidly traded and as such if more prone to dramatic percentage moves. For these reasons, I favor short silver in here with a downside target to around $12 an ounce, with a protective buy stop on the position on a close over $17 an ounce. Long term support for silver is down to around $7 an ounce. Industrial demand is weak, and both gold and silver are more an "inflation" and weak dollar play than real word supply and demand factors, right now. Therefore, they are more "castles in the sky" or a house of cards, with a lot of non support "air" underneath. All in my humble opinion of course, but that's how I am playing it.

Edited by norton, 14 November 2009 - 12:33 PM.

Just thought I'd mention that the chart he shows doesn't look like my chart of the Dec futures. My guess is that the chart he's showing may well be after Thursday. Friday, we had a big up day in gold, closing near the highs for the entire move. So this video must be a day late. Obviously, at some point, we're going to get another correction in gold. But you could not have told that Friday. IT

Short specs still have a lot more chances to part with their money. Like friday.

Short specs still have a lot more chances to part with their money. Like friday.

The COT data for gold is not near the indicator it once was for traders. In early Fall of 2007 the commercials took on a record short position (at that time) about the time gold broke out and ran from around 700 to 1000 in a few short months. I'm bullish on gold LT for a number of reasons but agree a correction can come at any time. It seems like corrections in gold/silver have been sharp and severe. I think there's a chance this changes as the biggest players will be waiting to take on physical when corrections arrive. Gold corrected the LEAST of any major commodity during the 2008 debacle. I believe there is a China put under the gold market.