On the heels of gold and silver continuing to consolidate recent gains ahead of the release of this Friday’s Non-Farm Payrolls report, which traditionally is used to smash gold, below is a famed short seller’s take on the gold and silver pullback, plus must-see gold, silver and GLD sentiment charts!

“What really drove this correction — besides random noise and positioning of specs in the futures market, who got pressured as prices fell — were a couple factors, IMO. First, I think that Venezuela is puking gold to get cash, in addition to “normal” sellers, and we now have this recurring narrative that the Fed will hike, and maybe more than once. The economy therefore must be getting better (because the Fed knows what its doing, right?).

Meanwhile, other CBs are waaaaay behind the Fed, so the dollar is bid, and the Fed is brilliant — or some variation of those themes. They are fantasies, but people believe them, and given how the gold market was set up after a big run, all of that helped trigger what we have seen. The pressure from the trapped specs in futures is probably about over with, given the CFTC data from Friday and what has likely happened since then.” — Bill Fleckenstein

King World News note:  I would just add to what Fleckenstein has said by noting that sentiment for silver has been tumbling aggressively and now well below “Excessive Optimism” levels (see 3-year silver sentiment chart below from SentimenTrader).

KWN SentimenTrader II 6:1:2016

King World News note:  It is also important to note that sentiment for gold has been plunging aggressively as well from near “Excessive Optimism” levels (see 5-year gold sentiment chart below from SentimenTrader).

KWN SentimenTrader III 6:1:2016

King World News note:  But take a look at the sentiment readings on the Gold ETF GLD, which has plummeted all the way down from “Excessive Optimism” at the peak of the gold rally, to “Excessive Pessimism” (see 6-month GLD sentiment chart below from SentimenTrader).

KWN SentimenTrader I 6:1:2016

King World News note:  At the beginning of this cyclical bullish phase of the secular bull market in gold, sentiment still remains subdued, but that’s what bull markets do, they “climb a wall of worry.”

It would appear that the endless talk about the massive commercial short positions in both metals coupled with the bullish advance coming on the heels of a brutal 5-year cyclical bear market is keeping a healthy level of “fear” in the early stages of the newest leg of the bullish advance.  So it will be very interesting to see how gold and silver trade from current levels in the days and weeks ahead.

***KWN has now released Pierre Lassonde’s remarkable audio interview, where he discusses his $10,000+ gold price prediction and much more CLICK HERE OR ON THE IMAGE BELOW.

***Also just released: Legend Warns The Coming Crisis Will Be Totally Devastating For The World Economy And Humanity CLICK HERE.

KWN Lassonde mp3 5:28:2016

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