Breaking News

The Last Buy-The-Dip Opportunity In Gold We May Get

By Commodity Trade Mantra CommoditiesMar 15, 2019 14:11
The Last Buy-The-Dip Opportunity In Gold We May Get
By Commodity Trade Mantra   |  Mar 15, 2019 14:11
Saved. See Saved Items.
This article has already been saved in your Saved Items

The big picture remains the same: When the Fed reverts to QE and the dollar tanks, Gold and everything else will soar. I believe a return to QE is inevitable at this point.

If the stock market dump in the 4th quarter has taught us anything, it is that the markets cannot survive without ever-increasing stimulus, just like any Ponzi scheme. Meanwhile, U.S. deficits and debt continue to soar, with unfunded liabilities about to hit en masse next year. At the same time, economic acitivity and tax receipts are falling. This means more and more treasury bonds are being issued when the Fed is still reducing its balance sheet and foreign buyers have gone on strike. There is only so much the domestic market can soak up before becoming saturated, forcing yields to rise and debt interest costs to explode. The Fed will be forced to revert to QE to prop up stocks and bonds (keep yields down), and will sacrifice the dollar in the process.

Looking at Gold in the short term, starting from a technical perspective…


My primary scenario remains an ABC move lower to test the 200-day moving average at ~1252 or the 200-week moving average at ~1241. Wave A was the drop from 1350 to 1280. We reached 1312 yesterday, which may be the high of Wave B, and now we’re heading down in Wave C to the moving averages or possibly even lower.

Should Gold prices break those moving averages, we could go as low as 1172 on a “closing” basis in an ABC move down. Wave A being the drop from 1360 to 1184 from April to August last year. Wave B was the rally from 1184 to 1348 that ended on the 20 th of February. Now we’re in the wave C, down to 1172 where A = C or a double bottom at 1184 closing or 1167 intraday.

I am not saying this is going to happen, but it is a risk should those moving averages break.

The weekly chart shows that although the price has been rising from its recent intraday low of 1281, the MACD Histogram continues to fall, which supports my primary thesis for a further drop in Gold next to the support zone at 1241 to 1252.


The Daily Sentiment Index, or DSI, hit 90% the day Gold peaked at 1350 on February 20 th. It fell 39 points in just ten days to 51, where it closed at its low of 1285 on March 5 th. Consider this drop Wave A. Since then, it has risen 20 points back up to 70% yesterday, or the peak of Wave B. If this is an ABC move lower, expect to see Gold fall to at least the teens next before it finds a definitive low.

The 21-day moving average has already turned down from a lower high and has a long way to fall from here.


The latest positioning data was as of March 5, when Gold closed at the low of 1285. Open interest was 471k contracts. Money Managers or “Funds” were net long just 31k contracts. Commercials were net short 114k contracts, relatively low by historical standards. Other Reportables and Small Specs made up the difference.

Since then the gold price has risen to 1312, just $27. But open interest soared to 530k contracts yesterday. This equates to a delta of 59k contracts in just one week, a 12.5% increase, for a price change of $27, or just over 2%. To put this in perspective for you, in the last twenty years or 1040 weeks, the 1-week delta has only been higher on three occasions:

Now, I don’t want to get into a whole discussion about the manipulation of the metals market, but this is downright obvious. There is no justification for such a massive increase in open interest, especially after such a tiny move up and with Funds holding a relatively small long position, other than the Bullion Banks are loading up on the short side to prevent Gold prices going higher and planning to make a sizeable profit in the process, as always.

The bad news is that this likely means that we are going lower, perhaps up to $100 lower.

The Banks are clearly going to attempt to squeeze almost everyone out of the market before the massive rally to come, in my opinion. The good news is that in each of the prior cases this has occurred, most notably 2008, the price rebounded to new highs after the sell-off. This could be the last buy-the-dip opportunity we get, courtesy of the Bullion Banks. –

The Last Buy-The-Dip Opportunity In Gold We May Get
The Last Buy-The-Dip Opportunity In Gold We May Get

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email