Important 2017 Update
We saw a correction, yes, a likely pullback given the rebound of 2016, but its performance of the past few months has been disappointing, to say the least.
I can’t go back in time, so let’s look at where we are right now.
For gold, the best rallies occur when we see a high level of short positions and extreme bearishness.
The precious metals sector, more than any other, is moved by sentiment.
Today, the gold bets are all bearish, to the point that we haven’t seen this high of a short position since 2015.
The last time the shorts had this much conviction, gold rallied from $1,050 to $1,350 in a matter of months!
A nearly identical set-up happened in 2016 as well: the shorts felt confident and gold proved them wrong by rallying from $1,140 to $1,290.
Here is a chart from our friend Marin Katusa, founder of Katusa Research.
Don’t forget that the fiscal year is coming to a close and D.C. still needs to come together to pass a budget and raise the debt ceiling. President Trump and the Freedom Caucus have already stated that without border wall funding, the government will shut down.
For silver, we see an epic rally coming.
Overall, the market here is very pessimistic.
The bottom line is no one wants anything to do with the precious metals, to the point that they are hated.
We need to see an uptrend confirmed, but in my opinion, we are within weeks of seeing this.
Look for more updates on this sector from us next week.