I think either this is the bottom or we are very, very close. I say that because we are deep within levels where we are seeing evidence of sovereign-sized gold buyers, particularly at the LBMA afternoon fix.
I also think we will be seeing real critical mass in a number of foreign markets that look very promising. The gold market that is now up and running ahead of schedule is in Shanghai. This is another potential catalyst for true price discovery. This development can only be bullish for gold. China is the largest source of demand for gold in the world. So this is another brick in the wall in terms of the recovery in the gold price.
Right now sentiment in the gold market is as negative as I can ever remember it. It’s even worse than it was at the bottom in June of 2013. So the elements are definitely in place for a rebound to the $1,350 area. After that we will have to wait and see.
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