Orchid Research: "Buy Bottoms for Gold" - News-Credit-Mortgage-Coin

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Thursday, November 12, 2020

Orchid Research: "Buy Bottoms for Gold"

 



Orchid Research emphasized that, despite the price drop this week, Gold will make more moves in the direction of the rise, and that the benefit will be seen with this rise after the US elections amid the COVID-19 uncertainty.


Dry Powder Level Analysis

Orchid Research said in a Seeking Alpha post on Wednesday, “While the location of gold is long-term, we expect it will rise further in the coming weeks, based on our analysis of dry dust levels. "It seems that this will continue to increase uncertainty in the aftermath of the US elections, in an environment where additional stimulus measures are needed to combat COVID-19."


The post-election scenario includes macro uncertainty, more incentives, and rising cases of coronavirus, all of which mean supportive drivers for gold.


Orchid Research recommends purchasing price reductions at SPDR Gold Minishares (NYSE: GLDM). In the post, “Our trading range forecast for GLDM on a 1-month view is $ 18.00-21.00 per share. "We are buying drops with conviction and expect GLDM to reach $ 21 per share next month," he says.


Prospect of Ascension

Another opinion included in Orchid Research's analysis is as follows:


“An important indicator to look for positioning in the gold market is to analyze the level of dry dust among money managers (ie speculators) in the CME gold futures market. To do this, we separate money managers with long positions and money managers with short positions. For each category, we determine the number of investors reported by the CFTC. We also present this information in the visualization below. "



In the article, "We can see that the number of MM longs (currently in 100) is not extremely high. This indicates that there is enough dry powder among this category of traders to raise gold prices in the near term. Our dry powder analysis shows that gold prices may rise in the coming weeks and months ”.


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