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Why Gold Could Shoot $200 Higher – Starting Now

By Dr. Steve Sjuggerud
Tuesday, August 11, 2015

As I write, "large speculators" have given up on gold...
This is such an extreme, we have seen it only two other times in the past eight years.
Each time it has happened, gold shot up a quick $200 an ounce...
Those two times both happened in 2013. And gold shot up from around $1,200 per ounce to around $1,400 per ounce within three months of seeing this extreme each time.
In late 2007 and late 2009, we had extremes that were less extreme than today's... But gold still soared by $200 per ounce within four months in EACH of those instances as well.
You can see it on the chart below...

As you can see, gold typically bottoms when these extreme lows are hit – and it's usually good for a three-to-four-month run higher.
So what are these extremes?
They are the commitments of REAL DOLLARS by "large speculators" in gold futures contracts. This data comes from the Commitment of Traders report – a weekly report by the Commodity Futures Trading Commission (CFTC), which is the government entity that regulates commodities trading. (If you want to know exactly what the data shows, it's non-commercial traders' net positions in gold futures.)
I love to see what's happening with REAL DOLLARS in gold futures contracts... The real dollars cut to the chase.
And when the commitments of large speculators in gold futures reach an extreme low – like today – gold is typically near a bottom.
Sentiment on gold has only been worse than today once in the past eight years, according to my friend Jason Goepfert of That was at the midpoint of 2013 – and gold shot from $1,200 to $1,400 quickly after that sentiment extreme.
In short, gold traders are beyond scared. They're throwing in the towel on the gold trade. They are bailing out on their positions, having to cut their losses.
This has to bring us close to the point where there's nobody left to sell... That's how gold can rally by $200 in the next three months.
The timing with sentiment indicators is a bit tricky. So today might not be THE day... But we should be close.
These extremes are more pieces of the puzzle that shows gold should be near a short-term bottom – and could shoot up as much as $200 in three to four months – starting soon...
Good investing,

Further Reading:

"Gold stocks are now down 87% in the past four years," Steve writes. "This is what a bottom in an asset often feels like." The problem is, calling a bottom right is tough... Find out what Steve's looking for before he becomes a gold-stock buyer here.
Before you invest one dime in natural resources, this classic interview with master resource investor Rick Rule is a must-read. In it, he reveals everything you need to know to master the resource market's cyclicality. If you catch one of these big cycles at the wrong time, you can lose a fortune. But if you catch one early, you may never have to work again.

Market Notes


Today's chart provides a major warning about holding high-yield bonds...
Longtime readers are familiar with Porter Stansberry's stance on the high-yield, or "junk," bond market. In May 2013, Porter gave his first warning, saying it was "the single greatest threat to your wealth you will ever face."
If you want to see the next bear market in stocks coming ahead of time, Porter recommends focusing on the corporate-bond market, which is where companies go to borrow money. Without a healthy corporate-bond market, some companies would drop to zero almost overnight.
The iShares iBoxx High Yield Corporate Bond Fund (HYG) is one of the best ways to follow the corporate-bond market. As you can see in the chart below, junk bonds fell sharply shortly after Porter's warnings... and they've been continuing that downtrend since. Today, these bonds are trading near their lows of the last three years. Porter's prediction has been spot-on... and he believes this trend will likely cause our next bear market...

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