(Originally published on December 14, 2016 at goldtradingmastery.wordpress.com)
This is going to be a very short blog post.
All I am going to say is that I believe the dollar rally/gold crash has not yet come to an end and will not come to an end tomorrow.
Keith Weiner’s latest supply and demand report is out. It shows that the gold basis has not budged since early November – even though the price of the dollar has been skyrocketing. At the same time, although the gold CoT report is showing heavy selling of long positions, there is still plenty of room to go before we get back to last December’s levels. These are both very bullish indicators for the dollar and bearish indicators for gold.
The one piece of good news for gold from the CoT report is that open interest has now declined back to normal levels. But with so many longs still out there, it means that longs as a percentage of open interest are still very high. So there’s still some paper gold buyers holding on till the very end. I’m going to wait till they get flushed out before I get rid of my dollars.
Here’s the chart for the gold-price of the dollar as of 5:00 p.m. EST today.
RSi is still overbought, and now we are seeing what looks like a moving average crossover…except it’s not. It’s going sideways, not crossing over. With the dollar moving as fast as it has over these past few weeks though, I think this is the closest we are going to get to a “pullback”.
It’s now or never.
I’m setting a forward order to buy dollars (sell gold) at 0.879mAU/$ ($1137.04/oz.), with a stop at 0.869mAU/$ ($1150.53/oz.) and a take profit point at 0.903mAU ($1107.23/oz.).
I’m risking about 6% of my account.
Tune in Saturday to see how the trade went. 🙂