At the beginning of 2016 I was very bullish metals. I was very bullish Brexit and thought it would help Gold and I was very bullish Trump and thought it would help Gold.
It doesn’t matter “what I think” in the market it only matters “what the market thinks.” So there was a lot of Metals buying in the beginning of 2016. (I am going to try and walk you through the chart below). And there was even MORE buying when Trump won the primary at the end of April and early May. This was quickly sold off to kill the chasers.
Then after the metals reset, more bad data came, the FED was not going to raise interest rates, and GDP was going negative. Boom! Gold spiked over the Summer. Then Brexit happened, which is the big green bar in the middle of the summer rally. Everyone Missed that move AGAIN.
After that, everyone bought AFTER the move all through the summer (Circle 2). Well, right before the election everyone who was long was wrong and the Brexit move was unwound and metals and got hit on the Fed raising rates.
Then Trump won. Gold Spikes back up to the Major Resistance trend line and reversed. (Circle 3)
This is where it was confusing and I suppose was forced major selling in bonds and metals because of the devaluation of the Yen. I was okay with gold reversing but I was not okay with it selling off THIS much.
Gold and bonds have been KILLED. Everyone says gold under 1000, gold under 900. and rightfully so, it is broken. But this is truly what blood in the streets looks like. If this is a generational bottom in gold, here is what holds the cards.
This may have set up the largest shakeout in history. Look at this chart below.
Silver leads gold. Silver leads the rallies and the bull markets both Up and down. When gold spiked on Trump, silver DID NOT MOVE. The silver gold ratio has a CLEAR breakout and sideways movement.
If this begins to turn up, and hold this blue line, you may be witnessing one of the quickest bearish overthrow repairs you have ever seen.
It may be starting tonight with the USDJPY breakdown.