Michele Schneider | Jan 26, 2023 12:35AM ET
I started this year saying that to date, gold has been sold on strength and bought on weakness. And that the day strength is bought is the day we begin a much bigger rally.
A Few Gold Headlines:
Gold prices hit a record high in Japan
China steps up gold imports in 2022: Swiss gold imports at 4-year highs, Russia gold imports rise
Swiss pension fund increases exposure to gold
Every time we look at the price of gold, we take one step closer to realizing our prediction of the $3000-$3500 price target by 2024 and not ruling out a trip to $5000 by 2025.
Yes, gold is overbought at current levels. Yet, haven’t you heard the expression, “Overbought can become more overbought?”
Of course, you have. However, not for some time. Probably not since the huge bull run of 2021-and of course, as it related to equities.
Dear readers, we were primarily commodity floor traders for two decades. We are presently bullish on the metals. We have been hammering this home since post-covid.
Now though, we see a new phase, a parabolic one.
Back in the day on the COMEX Exchange in the World Trade Center, pre-social media, pre-24-hour news loops, everyone was a trading genius at least once in their lives when in the late 1970s, floor traders bought dips in gold and silver.
Local traders did not concern themselves with calling corrections or tops. We were there to trade price and momentum.
After a very long wait, those days in the metals have returned.
With proper risk management ALWAYS, dip buying on corrections makes a lot of sense. Other than a very rich relative strength indicator, we see little in the way of a top at this point.
The landscape mimics (on steroids) the 1970s. With current macroeconomic and geopolitical conditions such as they are, 2023 is even more bullish for the metals than it was five decades ago.
And silver is not far behind.
Retail investors have yet to load up on precious metals. Most are trained to buy equities and know little about commodities.
Right now, retail investors sway bullish on stocks. Once metals gain more of the retail trader’s attention, can I get a P-A-R-A-B-O-L-I-C?
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