“I read Dan Norcicni’s latest interview on KWN and his views pointed me directly back to the piece I sent KWN on January 23rd of this year. In that piece I shared my views on the coming mania in gold and silver. But like all market trades and investments, timing can be very hard. However, with current fundamentals and market positioning the time for the mania phase could be upon us.
Reviewing the charts one can see that the last setup and requirement for the mania phase to really begin is that many market participants need to be caught in the “bear trap,” clearly noted on the life cycle chart (above). Evidence today, highlighted by Norcini, is overwhelming that there are historically unprecedented short positions in silver, and very large shorts in gold….
“Sentiment to the metals is very negative with most mainstream research analysts recommending neutral to short positions in gold. The setup could not be more perfect. All it needs is the catalyst to get buyers in and the bears to start to covering shorts.
Have we just had the catalyst out of Japan? My sense is world currencies have just had their Lehman moment, and that came from the BoJ announcement on their accelerated QE program. Let’s not forget that Japan is the 3rd largest economy in the world, and the BoJ has just eliminated the yen as a possible currency allocation option for global investors.