Gold’s current action is simply part of the old Brexit breakout- Matterhorn top move. We got the breakout and now we have the back test. I don’t know of any way to assuredly predict how deep the BT has to go. Many methods have been postulated, but frankly I for one don’t know how to handicap it. But I would suspect 2 likely scenarios. #1 is we have seen enough and we can now go higher and resume the march higher. #2 is we need to base a bit more and perhaps make investors sweat a bit more first. That would be the shakeout down to the Blue dashed line around the 1282 level. That would of course hammer the HUI.

Myself I removed half my chips off the table back on July 6-8 after my proprietary oversold indicator triggered a top. Yesterday I bought back 1/3 of the positions I had sold. As for me I would like to see the full shakeout. I don’t like to trade these moves but this was an exception.
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I have been a strong advocate of be right-sit tight for the entire move, and I still stand by it, however I received such a strong definitive signal that I had to partially get off my horse. It was such a strong trigger that I went back and checked and it was the most extreme overbought cluster of indicators in the last 15 years. Pretty incredible. But here is the thing, the fact that we have only pulled back slightly indicates to me that this move up is extraordinarily strong and once it resumes we could get a rapid surge to my original forecast of HUI 350. Possibly this is the set-up for that move. Maybe its a fuel stop along the way sucking in short sellers so it will be the fuel of short covering that will power the move from here. Just a thought.
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