As you mentioned, speculators can be right for quite some time. This is one reason I’ve been trying to stagger my purchases in case we go down again. I want to have some funds in case there is a bigger capitulation. Although I must add that the temptation to buy now is very strong. In fact, maybe it was worth buying on Friday and trading some parcels this week, for a easy gain.
Latest commercial hedger position is one of the best that you will ever get to see. I think I was on the current track when I mentioned last month that gold is in a bottoming process although I thought GDX 21 would hold. Commercial position clearly indicates that they believe that there is a strong bottoming process.
Major risk now is that commercials are a little early (they often are). So, at least if someone has a one year time frame where they’re prepared to wait, goldies could represent some good value.
Interesting that you mentioned a possible visit of 45-46 c for SLR. Around 45 c was 1 possible target that I had in mind for a re-entry, looking at support. If you look at rise since March 35 c, we rose almost relentlessly to around 64.5c, with barely any support line in between. This was one reason why I sold off when we visited 64.5 c again, as I feared a double top (rightly).
SLR could probably represent great value if we get there.
SLR Price at posting:
49.5¢ Sentiment: None Disclosure: Not Held
