Sam Briggs

27th August 2020

Why a gold rally is around the corner

Andrew Maguire predicts a gold rally beyond the upcoming BIS options expiry.

‘Talking Gold’ – a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets –  a regular feature from the Kinesis Youtube show ‘Live from the Vault’.

In this week’s rundown of the gold and silver markets, Andrew Maguire explains why moving past the upcoming Bank of International Settlements options expiry, the stage is set for a rally in the price of gold.

Why is options expiry important?

According to Andrew Maguire, the Bank of International Settlements (BIS) are aggressively weighing on the gold price ahead of the upcoming BIS options expiry. 

The precious metals expert believes the BIS are ensuring gold is comfortably south of the $2000 mark ahead of the August 31st event, which will be settled Friday 28th August, due to the disruption of UK holidays. 

As Andrew Maguire sees it, all footprints of the counterintuitive selling the COMEX experienced on August 12th and 18th, lead back to the Central Bank’s Gold trading desk. 

Watch Andrew Maguire explain the recent monumental one-day losses in the gold and silver markets on last week’s Talking Gold from fortnightly Kinesis show ‘Live from the Vault’

Market conditions set for a rally

According to Andrew Maguire’s analysis, the aforementioned sold Comex positions are offset by the same market making insider banks getting on the long side of the sucked in shorts. The short positions in question are found across the Gold Futures and Silver Futures markets, as well as the much larger Foreign Exchange gold and silver markets. 

Andrew Maguire believes the market exhibits the “perfect setup for insiders to ride the rally into $2000 gold and $28 silver with the least speculators onboard.” Only when gold and silver breach these heavily shorted levels, will wrongfooted sidelined money come into play.

At current prices, there is little more fresh easy long money for market making insiders to rinse. Andrew Maguire believes insiders have been seeking to cover off all of their residual shorts, while positioning for a significant rally next week, when it’s least expected. 

Where does this leave gold?

According to the precious metals expert, “structurally, no damage has been done to gold this week.” In explanation, the precious metals expert points to weekly and monthly charts that remain bullish.

Andrew Maguire believes the upcoming options expiry in COMEX serves to restrain a fundamentally driven move of spot gold through $2000 per ounce. In Andrew Maguire’s opinion, with option resistance wavering, gold is coiling for a significant move higher

Andrew Maguire’s parting thought.

Everything is intact for Goldman Sachs’ $2300 gold target. It’s going to be tested, then $2500 comes into the crosshairs.

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Next Episode: Andrew Maguire conducts another thorough inspection of the gold and silver markets. 

 

The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. 

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.