Vince Lanci, founder of Echobay Partners said “The last three days have reconfirmed my commitment to a much higher gold price in 2018. We are making higher lows for the year – the recent behavior made me nervous, but something very telling happened in the last three days”. In technical analysis parlance, when a trend forms with higher lows, this indicates that a pennant is forming and it points to a upside break out. But as I mentioned in previous posts, it is hard to bet on the technical signals as they have ‘painted the tape’. I still remain hopefully that there is a breakout to the upside.
If Lanci’s predictions are correct, gold will hit $1,700 an ounce. On Tuesday, there was a short covering rally and Wednesday there was a 10,000 contract increase. According to Claudio Grass of Precious Metal Advisory Switzerland, the total trading volume in the London Over-the-Counter (OTC) gold market is estimated at the equivalent of 1.5 million tons of gold and only 180,000 tons of gold have been actually been mined to now.
If one were to examine the number, it would be clear something is very wrong. A seismic blow up is coming in the market will this be the year?