by Adam Hamilton
Zeal LLC
Gold has been correcting following last summer’s powerful bull-breakout upleg. Since peaking, gold has inexorably drifted lower in a well-defined downtrend. Traders are wondering when this necessary and healthy sentiment-rebalancing selloff will bottom, paving the way for gold’s next upleg. But this correction still has a ways to run, according to speculators’ gold-futures positioning which dominates gold’s price action.
Gold has enjoyed a strong 2019, still up 15.0% year-to-date as of the middle of this week. Unfortunately its gains have been overshadowed by a bigger stock-market surge, driven by extreme Fed easing. This central bank shifted its rate outlook from hiking to cutting, made 3 rate cuts in just 3.0 months, and birthed its massive 4th quantitative-easing campaign to monetize Treasuries! That’s incredible in just a half-year.