The COT levels are actually quite bullish for gold.
Almost 800 million dollars worth of paper gold was dumped on the market this morning. The question we have to ask is whether the cartel is trying to cap the gold rally, or are they just trying to create temporary lower prices to scoop up some more shares before the next leg up?
The 4 year bear market in gold has programmed traders to expect failure. That is 180 degrees the wrong attitude to have this late in a bear market. At this point instead of expecting failure you have to give every rally the benefit of the doubt. The longer this bear continues the greater the odds become that one of these intermediate bottoms will turn out to be THE BOTTOM.
The metals have begun the second leg up in this intermediate degree rally. Miners are on week one of a new intermediate cycle and should still have 5-7 weeks before topping.
I’m seeing some signs that gold mining stocks may have just printed an undercut bottom.
Caution is warranted. I don’t think stocks, oil, or the Shanghai composite are finished dropping into their intermediate cycle lows.
A quick summary for the dollar, stocks, and metals.