Here Is The Reason For Gold’s Massive Surge Above $1,300

With gold surging above the critical $1,300 level, today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 6 absolutely stunning gold charts illustrating the why the gold market has smashed well above key resistance.  Eric Pomboy, who is founder of Meridian Macro Research, also provided incredible commentary to go along with the 6 remarkable gold charts, as well as what all of this means going forward for the gold market.

July 22 (King World News) – Gold Surges Through Key $1,300 Level – Charts Of The Day

COT data for week ending 7/16 show Commercials added to their Net Short Position by ‐5,566 contracts.  As for the Specs, they added +6,905 contracts, bouncing off the lowest Net Long position since 2005.  It’s too early to tell of course, but the data may signal the bottom for Gold is in.

 

 

Looking at the Net Commercial position in relation to Open Interest (see below), we get a strong flashing buy signal at these levels.  Again, too early to tell, but the data would certainly suggest a significant and extended rally is near.

 

 

The Gold relative to Net Commercial Position chart is most telling (see below).  We’ve seen a huge bounce off the historic low of ‐6.75, to ‐5.27, a 22%, 1‐week bounce.  The exact same happened at the 2005 and 2008 bottoms for Gold (at $412 and $712 respectively) — In 2005, a 1‐week (22%) bounce from ‐1.10 (low) to ‐0.85; in 2008, a 1‐week (22%) bounce from ‐1.13 (low) to ‐0.88.  Each time signaled a bottom for gold, and each time a 70‐72% rally ensued.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/22_Here_Is_The_Reason_For_Golds_Massive_Surge_Above_$1,300.html

5 Incredible Charts Covering Gold To The “Surprise Index”

Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 incredible charts illustrating covering everything from gold to the “surprise index.” Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided tremendous commentary to go along with the 5 stunning charts, as well as what all of this means going forward.

By Eric Pomboy Meridian Macro Research

July 10 (King World News) – Gold & Silver Charts Of The Day

“The COT data for week ending 7/2 show a 35% reduction in Net Commercial Position to ‐22,776 contracts … the least Net Short reading since Jan 8, 2002 when gold was $279/oz. With a Net Long reading not far off, a significant upside reversal for gold is clearly in the works.

Regarding Friday’s Payroll Report, things are not as rosy as the headline data suggest. First, 195k jobs added sounds like a solid number … but it’s only 79k jobs above the (6mo. average) of Population Growth. Second, if you look at the gap between U6 and U3 number of unemployed (chart below), the monthly change was a staggering +786k persons … the largest monthly jump since December 2008 (+800k), thus the rise in U6 rate from 13.8% to 14.3%.

Third (next chart), the number of full‐time employed dropped by ‐240k, bringing full‐time employed as % of Total Labor Force to 74.4% … still in historically low territory and indicative of a very uneven labor force (full/part time) composition. In the last 3.5 years, 5.43 million full‐time jobs have been created. In order to reach a more ‘ideal’ 79‐80% over the next 4 years (factoring‐in population growth), we’d have to create about 12 million full‐time jobs, or 250k jobs per month … which seems highly improbable. Considering full‐ time jobs dropped ‐240k and part‐time jobs jumped +360k for June, we’re clearly moving in the wrong direction.

Also, the total of Non‐Full Time employed is at a fresh historic high as of the June data…up +400k to over 28 million people. The takeaway from these numbers is: we could get to 6.5% (or even 5.5% or lower) headline U3 unemployment rate in the next few years, yet based almost entirely on part‐time job creation. None of this is good news, as quality of jobs is clearly more important than quantity….

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/10_5_Incredible_Charts_Covering_Gold_To_The_Surprise_Index.html

Stunning Gold & Silver Charts Reveal Shocking Global Situation

Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 absolutely stunning gold and silver charts illustrating the shocking global situation in both metals. Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided incredible commentary to go along with the 5 stunning gold and silver charts, as well as what all of this means going forward for the gold and silver markets.

“The Net Commercial Gold Position has moved even closer to positive territory (reduction of 20% for week ending 6/25). The nearly $560/oz drop since the announcement of QE3 in mid-Sept. 2012 has resulted in the most bullish Commercial reading since August 2002 when Gold was $310/oz.

Given the enormous volume for just Wednesday-Friday (total of 873,719 contracts…the largest 3-day volume since the mid-April smash), I would not be surprised to see the net short position cut nearly in half by next week, with a net long reading not far off.

The next chart offers a different look at the COT data as we wanted to get a sense of Gold’s performance relative to the very bullish Net Commercial position. Since October 2012, the Commercials have pared their net short position by 87%, yet the overdone selling in Gold has resulted in a huge disconnect when compared to prior cycles.

Friday was a strong day for the Gold miners. Spot Gold was up $34, and the GDX (+7.5% on the day) traded a record 75.3 million shares…more than 1 million shares above the April 15 (previous) record when Spot Gold dropped $135/oz (GDX -10% on the day). The (14 day) Relative Strength Index for GDX surged +11.1 points on Friday to 39.14…above the 30 ‘oversold’ level….

“The RSI has been below 30 three times this year (all since late February). The last time we saw 3 consecutive oversold readings in just a 4 month span was when Gold made its bottom in 2008. In sum, it would seem the Gold miners may finally be back on firm ground.

Looking at the Dow/Gold ratio, in the ’74-’76 period the Dow rose +73% while gold retreated -40%. Gold has retreated -36% from its Sept. 2011 high (-38% if using Friday’s intra-day low), while the Dow has risen +127% from its 2009 lows (up +40% since Sept. 2011). In our estimation, the ratio reversal should not be far off, if not already here.

Our last chart shows value of US Gold Reserves is at historic lows relative to Monetary Base, below 2001 levels when Gold was in the mid-$200’s. Gold would have to be $3,850 today for Reserve Value just to match 31% of Monetary Base seen in 2008 as the recession took hold.

Gold has endured quite a drubbing, and the naysayers are piling on. The bear case: Gold pays you nothing and its 15 minutes of fame have come and gone. That’s the extent of the forensic analysis. There is no mention that the global economy is in continued crisis and that easing policies are set to ramp up, not down.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/1_Stunning_Gold_%26_Silver_Charts_Reveal_Shocking_Global_Situation.html