by Pater Tenebrarum
So Far a Normal Correction
In last week’s update on the gold sector, we mentioned that there was a lot of negative sentiment detectable on an anecdotal basis. From a positioning perspective only the commitments of traders still appeared a bit stretched though, while from a technical perspective we felt that a pullback to the 200-day moving average in both gold and gold stocks shouldn’t be regarded as anything but a normal – and in this case actually long overdue – event.
[…] Between May and August, gold stocks became quite “overbought”. They had clearly risen too far too fast and a correction shouldn’t have been a surprise. The pullback was quite sharp, adequately mirroring the relentlessness of the preceding rally. This is nothing unusual in this sector: