Gold Short Squeeze has Begun!

On Wednesday evening, NIA predicted that a huge gold short squeeze was imminent. Gold had settled Wednesday at $1,219.10 per oz and NIA highlighted how gold’s managed money short position had just increased to a new 18-month high, together with its managed money net long position falling to a new 17-month low. On the previous two occasions that the managed money category of gold’s commitment of traders report had such a very high short position and extremely low net long position, gold exploded higher afterwards for gains of between $116 and $184 per oz within the following two months!

Gold has already begun breaking out big in recent days following NIA’s Wednesday evening announcement! On Friday, gold soared by $10.20 per oz to settle at $1,227.50 per oz. Today, gold rose another $6.20 per oz to settle at $1,233.70 per oz!

At the beginning of this month, the Fed Funds Futures market was pricing in 64 basis points of rate increases over the next 24 months. Today, the Fed Funds Futures market is only pricing in 48 basis points of rate hikes over the next 24 months. A September rate hike now appears to be off the table.

If there are any more rate hikes in 2017, the next one won’t be until December. It should be smooth sailing for gold over the next 3-4 months!

During the 44 trading days leading up to December 17, 2015, one day after the Fed’s first 25 basis point rate hikegold declined by $137.10 or 11.5% to $1,050.80 per oz.

Afterwards, gold exploded by $316.30 to a high on July 6, 2016 of $1,367.10 per oz for a gain of 30.1% in 137 trading days.

During the 114 trading days leading up to December 15, 2016, one day after the Fed’s second 25 basis point rate hike, gold declined by $239.30 or 17.5% to $1,127.80 per oz.

Afterwards, gold exploded by $129.60 to a high on February 27, 2017 of $1,257.40 per oz for a gain of 11.5% in 48 trading days.

During the 12 trading days leading up to March 15, 2017, the day of the Fed’s third 25 basis point rate hike, gold declined by $57.30 or 4.6% to $1,200.10 per oz.

Afterwards, gold exploded by $94.30 to a high on June 6, 2017 of $1,294.40 per oz for a gain of 7.9% in 57 trading days.

During the 7 trading days leading up to June 15, 2017, one day after the Fed’s fourth 25 basis point rate hike, gold declined by $42.20 or 3.3% to $1,252.20 per oz.

Leading up to the Fed’s first four rate hikes of the current cycle, gold on average has declined by $118.98 per oz in 44 trading days. However, following the Fed’s first three rate hikes of the current cycle, gold on average has exploded by $180.07 per oz in 81 trading days!