Gerald Celente, discusses the pullback in the gold market, which he predicted would happen at the recent peak.
A GOLD CORRECTION, NOT A CRASH:
October 30 (King World News) – Gerald Celente: Publisher’s note: As Gerald Celente had forecast on 16 October, there would be a sharp correction in gold, possibly going down some $500 per ounce when it was trading in the $4,350 per ounce range.
And correct it did, after hitting a high of $4,381 per ounce, today it sunk to $3,886 per ounce, and as we to press it is trading at $3,950 per ounce range.
Is the correction over? We are not sure at this time. Prices may go lower, but we do believe they are near their low and may fall a bit more.
But this is a temporary downturn as we see it. The global socioeconomic and geopolitical conditions will continue to deteriorate. And the lower they go, the higher gold prices will spike.
Here is the latest from the mainstream media on gold:
Gold’s sharp price decline last week was the steepest fall since 2013 and one of the largest sudden drops on record. The price of U.S. spot gold dove from $4,383 on 20 October to $4,006 on 25 October. After a short rally, the price dipped below $4,000 on 27 October.
On 6 October, chief researcher Nicky Shiels at refiner MKS Pamp wrote to clients that gold was “an overcrowded trade that’s overextended by every technical metric.”
As prices reached close to $4,400 an ounce, trader Marc Loeffert at Heraeus Precious Metals warned that gold was “getting even more overbought.” Gold’s price had grown by 30 percent in August and September alone.
Still, most traders who spoke with Bloomberg see the price reversal as a necessary, short-term correction, not the end of the rally.
“Bull markets always need a healthy correction to weed out froth and ensure the cycle has duration,” Shiels told Bloomberg last week. “Prices should consolidate and revert to a more measured bullish trajectory.”
The cause of the rally’s pause was unclear. Some analysts attributed it to hedge funds taking profits; others said Chinese banks sold some of their reserves.
On the Comex futures market, the ratio of puts—bets that gold’s price would fall—relative to wagers that the price will continue to rise increased to a level among the highest since the Great Recession in 2008, Bloomberg noted.
Still, there are few committed gold bears to be found.
“We expect de-risking and profit taking by investors to be met by dip buying from other segments of demand, including central banks and other physical buyers, ultimately keeping reversals relatively shallow,” Gregory Shearer, a JPMorgan Chase analyst, wrote in a client note. He sees gold at $5,000 an ounce by the beginning of 2027.
He cited the prospect of central banks scaling back their enthusiastic buying as the chief risk to his forecast.
Gold’s most recent surge is down to retail investors, with stores selling gold running out of items and more money surging into gold funds than ever before, according to Bloomberg.
In some of the world’s main gold-buying hubs, there was little sign this week that the fall in prices had dented their enthusiasm. Some dealers reported less interest after a hectic two months, but others had record sales.
Singapore’s BullionStar gold store had its busiest day on record Tuesday last week, the day after prices began to slide.
“We had a queue before opening, with many more buyers than sellers,” deputy CEO Pete Walden said. “Many are using it as an opportunity to buy the dip.”
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