Michael Oliver Reveals Encouraging Signs for Gold

On October 14, in Michael Oliver’s new service devoted specifically to gold and silver investments, Michael Oliver provided some hope for us in a year that has been very disappointing.  Here are some comments about gold from Michael’s letter that also included analysis on silver as well as GDX. This new and very affordable service also provides guidance on major gold and silver mining stocks. Go to www.OliverMSA.com to sign up for Michael’s letter.

“Two weeks ago we noted that the close on momentum finally ate its way above the recent multi-month downtrend channel. Last week gained more ground. 

“What’s clear as “next” resistance is the red horizontal. Four separate reaction lows define that momentum structure.

Much like how the momentum chart on the prior page found resistance at the lower red line (prior floor), we’d expect this red line to also act as resistance, at least for some sort of downside reaction. To hit that line in the next few weeks price would have to reach up to $1255 to $1260. So there’s only about a 1% price difference between this projected next resistance and the resistance level on the 3-mo. avg. momentum chart. 

“As we’ve said before, if these resistance levels are reached, while we expect some reflexive action there, just getting to those levels tells us that the August low was the low and that there’s a strong likelihood, once the resistance zone is overcome, that the next move will be to blast out the twenty eight month old downtrend structure (green line). We’ll define what’s required to take out that line once we see the red line overcome. (The 40-wk. avg. changes a bit each week and thus specifying the price-equivalent level of the green line would be premature.)”

John Rubino at www.DollarCollaps.com has also been pointing out the highly unusual large short position of large speculators and the net long position of commercial participants in the gold futures markets. It is highly unusual for speculators (largely hedge funds) to hold net short positions and it is also unusual for commercials (mostly banks) to hold net long positions. The last time this was true was before the birth of the bull market that started in 2002 when gold was under $300. It should also be noted that speculators are usually wrong at major turning points while commercials are usually on the right side. In fact, the Gold Anti Trust Action Committee (GATA) makes a good argument that the commercials manipulate the price of gold. If the equity market is finally hitting a wall, the picture could be getting much brighter for gold as we end 2018 and head into 2019.