Several weeks ago, I surprised most investors by issuing my ‘Book Profits Now!’ call for the precious metals asset class. When I did so, head and shoulders top formations immediately formed on gold and GDX, and prices have swooned. Rumours of a sudden drop in Indian dealer demand appeared to become a concern for commercial traders on the COMEX. India’s monsoon season has turned out to be a bit of a ‘bust’, with both flooding and drought. Farmers buy gold with a portion of their crop profits. With only another week or two left in the monsoon season, crop sales may not be very good. Of further concern to me was the fact that the demand drop was occurring as gold arrived at the $1352 resistance zone. That resistance was created by Modi’s cash call-in that took place in November of 2016. The upcoming Fed meeting will probably mark the end of the decline related to those concerns, but there could be additional weakness until the next US jobs report is released. Please click here now. Double-click to enlarge. For investors, this gold chart tells the entire tactical story. The $1270 – $1260 area is the target of the H&S top pattern. Investors should use a two-pronged strategy to profit from the coming rally that should take gold back to the ‘Call-In Day’ resistance around $1352. I’ve outlined the $1315 – $1295 price area as the first key buy zone. Eager accumulators can buy right now.
This post was published at GoldSeek on 19 September 2017.
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