⚠️ SELL SELL SELL! GOLD is on the VERGE of a Massive CRASH!

Wealth Wizards
8 followers
You've been told to buy gold out of fear that massive amounts of government spending
will lead to currency debasement.
In fact, we're talking specifically about the dollar.
But this recent crash in gold, it's not the dip buying opportunity you've been looking
for.
In fact, it's a brutal wake-up call that your untouchable hedge that can only go higher
is starting to crumble.
Now if you're overweight gold right now, it's threatening to wipe out your investments
as a massive amount of leverage is about to unwind faster than a meme stock.
And the trap now has been sprung.
And with everyone heavy long gold, I'm going to show you exactly why you need to sell now
before your wealth gets wiped out.
Now we see gold extended losses in a choppy session after suffering the worst route in
12 years on October 21st.
This was on concerns that its rally had run too far, too fast.
And by the end of market close, it had plunged 6.3% and that set up buyers to grab the dip.
But today, shortly after markets opened, the selling has now resumed.
Silver was much worse.
Following an 8.7% route, the selling continued.
Now the gold chart is starting to look like a meme stock breaking.
Pure panic here in the markets.
But if you own gold, it's not too late to cash in your gains.
Now if you think, ah Steve, these prices, they can't come down.
Think again.
Because when you see that gold is the most overcrowded, one-sided, hyper-leveraged trade
out there, then you're going to realize, as I'm about to show you, that the fire sale
is just starting.
Let's talk about the contrarian angle here because mainstream is going to spin this as
a healthy correction.
But it's nothing close to that because they want you to buy the dip as sellers step in
here.
Now surveys are showing that more than 80% of investors are bullish on gold and that
all this buying of physical and paper gold has forced hedge funds, institutional investors,
retail investors, algorithmic funds, you name it, traders, everybody has piled into the
long side of this trade.
And the problem for markets is once you have everybody on one side, well then the exact
opposite starts to happen.
And you're going to hear that technical selling is the main culprit.
This from Suki Cooper, the head of commodities research at Standard Charter.
Prices have been trading in overbought territory since the start of September, she said, adding
that the bank expected gold to regain its momentum next year.
Technical selling doesn't happen just because prices hit new highs or are in oversold territory.
It happens for other reasons here.
But I want you to hear and understand her message very clearly.
She's saying, look, don't panic.
It will regain its momentum in a few months or more.
And she's hoping.
And why is that?
Because some of these big players that have bought massive amounts of gold, they can't
sell it fast enough.
And that's exactly what you hear when nobody knows what really happened.
But hang tight, because I'm going to show you why this epic rally in gold is likely
over, because the reason investors are piling the gold is over the so-called the basement
trade in which investors avoid sovereign debt and currencies to protect themselves from
runaway budget deficits and bets of the Federal Reserve will make at least one outsized rate
cut by the end of the year.
Those have been the primary drivers for gold in recent months.
But yet investors don't realize the federal government can't print money.
Federal Reserve can't print money either.
And rate cuts don't inject liquidity into the financial system.
The only way a rate cut can inject liquidity is if people come out and borrow because rates
are lower.
Because remember, the only institutions that can create money, that's the commercial banks
when they lend.
So what we're facing right now is really consensus among investors that you just need to buy
gold.
Not to mention, they believe that the dollar is going to get weaker.
And adding to the narrative, foreign central banks have been big buyers of gold.
What you're seeing here again is everybody's buying gold.
But here's the truth.
If something is going up in price, and again, it doesn't matter what it is, you can think
back to every bubble back in the dot-com era, to the housing bubble, everybody wants in
because everybody wants to get rich.
And after staying on the sidelines for much of the early period of gold's rally, retail
investors have taken a bigger role in recent months and part of enthused by the debasement
theme.
And pictures showing queues of buyers lining up outside bullion retailers went viral on
social media.
Options volume on top gold-backed ETFs and futures contracts, a popular way for retail
investors to take big bets on the metal value, have surged.
And boy, wait till you see these charts I'm going to show you.
But what you're seeing right now isn't people just buying gold because they want gold.
They're speculating on the price going higher and that someone is willing to pay an even
higher price than they are.
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And we've seen this story before, particularly in meme stocks, but how about that recent
crypto Armageddon that wiped out billions of dollars in a matter of minutes.
The investors went all in and they leveraged themselves because they thought price was
only going to go higher.
And then the opposite happened and they got wiped out.
And that's what you're about to see is going to happen to gold.
Because right now, everybody thinks the dollar is going down.
So the real trade is sell dollars and buy anything but the dollar.
In this case, we're talking about gold.
Because eventually the older part of the gold bull story, continued central bank demand
to diversify away from the U.S. dollar may come back.
Because remember, the dollar is a safety trade, world's reserve currency here.
But at current levels, there's no rush to position for that.
Well, not yet.
Well, hang tight, because right now the dollar is slowly entering towards a breakout.
And when it does, this is the most crowded trade on the planet right now.
With the short dollar trade, when it breaks, the dollar is going to go screaming higher.
It's going to send gold plunging.
And due to the government shutdown, many investors are left in the dark at a time when investor
holdings of physically backed gold exchange traded funds reached their highest level in
three years as the bullion suffered its biggest one-day plunge since 2013.
So there's a lot of questions right now.
Why did gold come crumbling down on Tuesday?
Well, we're going to take a look why.
One of those reasons, it happens to be that investors are in the dark.
Because right now they're lacking the weekly report from the Commodity Futures Trading
Commission that indicates how hedge funds and other money managers are positioned in
U.S. gold and silver futures.
Without the data, speculators may be more likely to build abnormally large positions
one way or another.
And you can better believe that's exactly what's happening here.
Because once everyone's piled in on one side of the trade, the market shifts.
And what happens now you're seeing is people take the bearish side of gold.
And I'm going to give you the proof right now.
Let's take a look at some charts from Goldman Sachs' commodity desk, because what you're
about to see is going to shock you.
So if you're thinking what happened on the 21st is a one-off event, I'm going to show
you right now.
It could get and it's likely to get a whole lot worse.
And for the answer, we turn to Adam Gillard.
He's a specialist on the Goldman Commodities desk.
He writes that price first drifted lower during China before having stopped on the London
and U.S. Open.
What's more notable is that there was, quote, no obvious smoking gun we can see, suggesting
that nobody really knows what happened here other than the fact that you have a highly
lopsided trade.
You have the dollar looking to build here and break out.
And when it does, it's not just going to take gold with it.
It's going to take everything else.
Because remember, the biggest trade here, short the dollar, buy everything else.
Now, let's take a look at some of these shocking charts.
Let's first take a look at ETF volume here.
And what you're seeing as of Tuesday's close, GLD accounted for 8% of all notional U.S.
listed ETF volumes, meaning what happened here is people bought the dip.
They've been waiting for this.
But hang tight.
I'm going to show you why this isn't a dip buying opportunity that everybody thinks.
Let's now take a look at this chart of ETF options.
And this is a total amount of inflows gathered by spot gold ETFs over the past year.
Now, I want you to know that over half of this is attributable demand over the past
three months.
Think retail investors here, because what happens with retail investors, they don't
buy low and sell high.
They buy high and hope it goes higher.
So this is very critical to understand.
What we're seeing is people chasing price.
Now, let's look at this next chart of ETF options, because what we're seeing is GLD.
This is the ETF option.
Open interest notational sits at an all-time high.
Now, here's what I want you to understand.
If you're not familiar with this, when open interest hits all-time highs, it means the
hurt is all shifted in one direction.
So we have no balancing shorts to absorb any shocks.
Now, what this is telling the market, particularly why do you think what hedge funds are seeing
when they see this chart is there's nobody left to buy and no one's hedging themselves
on the downside.
So when everyone's bought in, traders and speculators will start to pile in on the opposite
end of the trade, thinking there's no buyers left.
Now, I want you to think recently, this is exactly what happened in the altcoin space.
It blew up.
What happened?
Everybody was levered long on that trade.
There was no downside protection, a shock hit.
And next thing you know, that leverage gets wiped out, price crashes, and people get wiped
out.
So the problem here for gold is we're also seeing a lot of leveraged trades.
And keep in mind, when leverage unwinds, price will continue to plunge until the market flushes
out all of the weak hands.
So what's the payoff here?
How can you profit from this?
Because this gold crash, as you've just seen, isn't random.
It's the market's brutal correction of an overcrowded leverage bubble that some people
think they can make a ton of money on.
Now, if gold prices breach their 21-day moving average, we're eyeing more downside.
We're thinking $3,800 an ounce or perhaps lower.
And this is based on some analyst targets.
But if the Fed resumes aggressive rate cuts amidst sticky inflation, a rebound here could
spark.
But there's no guarantee because if the dollar breaks out, you can see this could
turn into a volatile mess.
Now, here's the real part.
I want you to do this.
Think about selling and locking in some of those gains you've got on your gold before
the dollar short squeeze and leverage unwinds it and causes it to spiral down even further.
Now, maybe you want to hold your gold.
You think, well, maybe it's going to go up.
But what if it does go down in the short term?
You can hedge your downside risk.
Maybe you want to short gold or go along the dollar.
Both places can work.
So why does this hit home for you?
Because we're talking about your savings.
We're talking about your 401k.
You know, you might not own gold in your 401k, but you probably own tech stocks.
So what we're facing here, if the dollar does rally, you could see further job losses
and export-led heavy sectors.
You could see tech stocks come down.
You could see gold come down.
So here's what I want you to do.
Don't let the safe haven of gold illusion let you lead you to a big wipeout event.
Here's what I want you to think.
Diversify into bonds or cash equivalents now.
Trim your gold exposure, even if you want to stay long.
Maybe hedge those long positions and watch that $4,000 level.
If it holds, you may want to buy cautiously.
If not, it's time to cut and run.
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And you can't trade this based on buy itself.
In fact, he tells you you can't either.
With mine, you just follow the signals and buy.
But check this out.
Total return 51%, missing buy and hold.
Win rate just over 51% on half the number of trades.
Max drawdown right around the same levels here.
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I'm Steve Van Meter.
Thanks for watching.
Bye now.
