This Amazing Chart Shows Gold Set For Massive $1,000 Spike

Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN an absolutely extraordinary gold chart.  Eric Pomboy, whose sister Stephanie Pomboy appears in Barrons and who is founder of Meridian Macro Research, also spoke to KWN about this remarkable gold chart and what it means going forward for the gold market.

Eric King:  “Eric, I wanted to get your thoughts on this extraordinary chart you sent to KWN?”

Pomboy:  “Clearly the net commercials in the gold market are telling a completely different story than what we are hearing out of the mainstream media, CNBC, et al, that ‘The Fed is going to taper, the gold bull market is over,’ etc.

There is even a possibility that the commercials may go net long gold for the first time since 2001 (when gold was roughly $260).  But when you look at the chart, if gold were to repeat the moves seen in 2006 and 2008, when gold got down to the lower net commercial short positions, the rallies each time were a staggering 70% to 72% in gold.

If you go back to the 2005 bottom when gold was $412 an ounce, gold subsequently rallied to $714.  This translated into a 70%+ move to the upside in gold.  The same thing occurred during the 2008 rally when gold went from $712 to $1,215.  Again, a 70% to 72% rally....

“If we are in fact at this major bottom here around the $1,400 level, we should expect to see a roughly 70% rally in gold, which would take us to the $2,300 to $2,400 level.  Those figures may shock some people because the sentiment is so bearish right now, but that’s what we are looking at in terms of a rally in the gold market.

The worst case scenario is a summer where gold grinds in a bit of a trading range, which would allow the commercials to get long the gold market for the first time since 2001.  This would allow for another month or two of sideways trading while this massive bottom is being formed in gold.”
Read More: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/4_This_Amazing_Chart_Shows_Gold_Set_For_Massive_$1,000_Spike.html