Gold is near a 70-year breakout as the carnage in the crude oil market continues.
The following charts are from Jason Goepfert at SentimenTrader.
King World News note: Sentiment in the crude oil market recently hit one of the most excessively pessimistic levels in history (see 10-year chart below).
King World News note: If you take a step back and look at the long-term picture, sentiment in the crude oil market remains at one of the most excessively pessimistic levels in history (see 25-year chart below).
King World News note: Below you can see the commercial hedgers most recent position in the crude oil market. Note that commercial hedgers have continued to cover their short positions on the recent decline in crude oil, but still remain short crude oil from a historic perspective (see 10-year chart below).
What Does This Mean For Gold?
King World News note: The long term Gold/Oil Ratio has recently broken out to the upside and is now very close to resistance at the 30 level. A breach of the 30 level will send the ratio to the final resistance at 33 (see chart below).
King World News note: It will be interesting to see how gold and crude oil trade at the start of 2016, especially in light of the fact that gold has taken over a dominant leadership role vs crude oil.
The first three charts were from SentimenTrader. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
***ALSO JUST RELEASED: The Dire 2016 Predictions Of One Of The Top Economists In The World CLICK HERE.
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