GLDM - Why The Gold Rally Is Probably Stopping Here
2024-04-08 16:13:42 ET
Summary
- After the six-month rally, "too many" investors now believe the price of gold will move higher. This is a sure sign of an intermediate term top in my view.
- The current “puts to calls” ratio for GLD is .25, which means four times more money is going into calls than puts. This is historically very high.
- You also see extreme levels of bullishness in surveys of gold newsletter writers, which is at levels found at past price tops.
- The correction should last two or three months and might possibly take gold back to the breakout point of $2,050. However, the long-term trend for gold is still higher.
Evidence is mounting that the gold rally is ready for an intermediate term correction. New investors shouldn’t buy gold or gold ETFs now; better prices lie ahead. Current holders should lighten gold positions by 30% if prices move any higher. We have a maximum upside target of $2,450, which is only 5% higher. We are intermediate to long-term investors; not short-term traders....
Why The Gold Rally Is Probably Stopping Here