A technical bounce under way according to Jon Nadler.
For the time being however, late Monday night EW analysis indicates that we might witness a partial retracement of this latest large decline (from $1,800 to $1,671) owing to the fact that the Daily Sentiment Index at only the 9% level shows very few bulls left ‘roaming’ the market prairie. As a point of reference, back in May, when gold touched its 2012 lows at $1,527 the DSI showed a reading of only 5% bulls. The small traders’ commitment levels, albeit having declined from their largest position in 10 years, continue to show that what EW calls “the public” is still “overcommitted” to gold.
At any rate, at this juncture, despite Monday’s tepid, near-half-percent bounce in prices, a lot of repair work is still necessary in order to rekindle some of the cocksureness that had been on display up to the 5th of October peak in gold near $1,800 an ounce. EW opines that a bounce from here could carry gold to as high a level as $1,725 – give or take.
