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.