I want to again reiterate that what we are seeing in the gold sector is a launch, not a terminal blow off. It is important to keep this distinction clear going forward. While the daily chart is obviously getting strenuously over bought, it is not blowing off. It is subject to sharp reactions, but a blow off is the end of a move and with the entire macro seeming to come into place per all our weeks, months and years of work, I want to make sure we are all seeing things per those changes.
A blow off was silver’s ending action in the spring of 2011, Nasdaq in 2000, etc. What is happening, again assuming we are right on the fundamentals, is a launch or the thrust needed to give a new bull market escape velocity. The weekly chart calms things down and shows the point I am trying to get across. It is now doing something it has not done in 3 years, in climbing above the weekly EMA 75.
See this opinionated post at Biiwii for what is in play in the all important confidence game, which we have noted for years must start to fall apart for gold to get back on a bull. Can Yellen put this genie back in the bottle? I’ve seen stranger things happen, but in even mentioning negative interest rates, she does not inspire confidence. Again and again we noted that confidence must crack for gold to get the bid.
I don’t know how else to put it other than the sector is impulsively strong and for good reason this time, unlike all previous occasions in the bear market. The reactions will come and those will be buying opportunities as the macro currently stands.
There is no blow off, even if gold gets whacked. It would be an opportunity, again barring a miracle kick save by central planning.