Man-oh-man, the heat I am taking over my recent “Caution” stance on the near-term outlook for gold and silver is now verging on the theatre of the absurd, says precious metals expert Michael Ballanger.
Email, tweets, voicemail messages and every other form of indirect confrontation have been used to convince me that my reluctance to join the masses in piling into the gold trade after an 82% advance off the lows in the past six weeks in the NYSE Arca Gold BUGS Index (HUI) and a 20% advance in bullion prices year-to-date is somehow FAULTY. . .notwithstanding the fact that in my Dec. 8, 2015, email entitled “Keep the lead in the pencil…” I wrote:
“These first two days of the week are not fazing me in the slightest as I fully expect that the gold market is being primed for a major advance at or around the Fed announcement on December 16th. You can’t have the Commercial Cretins down to a paltry 2,911-contract short position versus all-time record shorts in the Large Specs and be timid in your positioning. Due to the time of year, it will be more volatile than normal but I just keep adding to my Direxion Daily Gold Miners Bull 3X ETF (NUGT) positions and await the eventual rape-job that is going to be inflicted on anyone short this market. I eagerly await the screams of protest as the market gets lifted above $1,100 next week and all those buy-stops get triggered. As for the miners, they are trading so egregiously discounted to historical norms that, according to a quant that I know, if they revert to the historical mean and gold did nothing, you would get a 40% advance in the HUI just for starters.
So with gold at around $1,078 at the time I wrote …read more