I’m having a hard time converting two MetaStock charts to a PNG for posting but they’re important enough that I may post them however I can, maybe as JPGs. (More on that later.)

My professional friend sent his latest chart and comment on gold over the weekend, stating that 89.9% of the most recent peak short positions held by Commercials were liquidated as of last Tuesday, July 31st.

“Gold** Weekly and Daily Dec
Rolled to Dec. Support 1200-1210. Resistance 1252-1259 range. There is a multiple bullish divergence showing up on the daily chart. That is a condition which thus far has failed to be accompanied by any solid positive price response. CFTC numbers showed the net commercial position was net short 31,738 futures and delta weighted options as of July 31. That was down from one week earlier at net short 49,820 and now down 89.9% from the previous peak of net short position of 315365 as of Jan 23.”

Here’s my MetaStock chart of  August 2013 Comex Gold showing the peak of Commercial Shorts down to the same liquidation percentage that year: (right-click and select “view image” for a clearer picture)

Over the following eight weeks the August 2013 Gold rallied from 1179.40 to 1428, a 21% upmove, even though Gold didn’t make a final bottom until two years later at 1045.40, 11.3% lower than the August 2013 low.

In 2015  August 2015 Comex Gold rallied 9.0% from its July low of 1072.30 to 1169, even though it didn’t finally bottom out until December 2015 at 1045.40, some 2.50% lower.

Also, one very smart Canadian posted this yesterday on the COT and chart situation of Gold:

https://goldtadise.com/wp-content/uploads/2018/08/ChartWorks-GoldMore-Extremes-in-COT-08-06-18.pdf

Rambus published a monthly log chart of gold this past weekend with an extremely bearish call. His record speaks for itself and we’d be foolish to ignore his erudite opinion. But if questioned I don’t believe Rambus would say he expects gold to drop to new lows below 1045 in a straight line.

The upshot of all this: I believe we’re highly likely to see a $100 rally in Gold before any such disasterous decline takes place – if  in fact it does take place. And I also think the Dollar Index is the key to whatever happens from here.