GoldMinerPulse: Market Sentiment Track Record

Chart for 19 April 2013 market close plus outlook for week ending 26 April 2013.


GoldMinerPulse Market Sentiment (MS) Metric Track Record

19 April 2013 View After Market Close: MS Makes New Multi-Year Low While Physical Delivery Strenghtens

Outlook for Week Ending 26 April 2013

Shanghai will be closed on 29 April 2013 for a public holiday. A further attack on gold towards the end of the week must be considered a possibility. Physical delivery on the SGE, and around the world, will again be the key metric to watch to confirm any trend developments.

I interpret the SGE open interest movements over the past week as positive for a strenghtening gold market based on the application of Wikipedia Open interest to SGE open interest positions:

While the 29 April 2013 holiday in Shanghai is another excellent opportunity for a paper gold attack, I also believe the strong world wide demand for physical gold delivery can not be ignored. Another paper gold attack could prove extremely costly in terms of gold flows out of the west.

While it is an open question as to how many tons of gold the US still holds (excluding gold that was leased out to the bullion banks), another paper gold attack could proven even costlier and to what end? Was the expectation that the paper gold crash would lead to a mass liquidation of physical gold holdings around the world allowing the bullion banks and US Fed to buy back bullion in exchange for fiat currency?

Finally, the talking heads are telling a gold bubble story while the world private wealth is showing us a different interpretation -- drops in the price of paper gold is an excellent reason to add to one's physical gold holdings and not a reason for selling. The strenghtening gold market thesis is supported by the trends in the SGE open interest.

The MS is setup for a sharp V shaped recovery from the 16 April 2013 lows, leading to 3 wave or 5 wave up move in MS over the coming months. However, on the other hand, further paper gold attacks can not be ruled out, especially with the 29 April holiday in Shanghai, so I am expecting POG and MS to end next week largely unchanges and setting up for a sharper move up in May/June. I expect that selling in May and going away will very likely be a poor play in 2013.

GoldMinerPulse Calls From Past Friday Market Closings

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