Charts suggest now is the perfect time to buy gold, says Jim Cramer

Advertisement

CNBC’s Jim Cramer told investors on Wednesday that gold is about to rise, making now an optimal time for investors to strike.

“The charts, as interpreted by the legendary Larry Williams, suggest that the general public is giving up gold en masse and he thinks now is the perfect time to buy,” the “crazy money said host.

Gold futures fell on Wednesday faced pressure from a stronger US dollar and government bond yields after Federal Reserve leaders the previous day’s aggressive comments about inflation brought the metals down.

Gold is considered a safe investment and often attracts investors during periods of economic and geopolitical turmoil.

Cramer began his explanation of Williams’ analysis by examining gold’s weekly action dating back to 2014, combined with the Commodity Futures Trading Commission’s Commitments of Traders report data.

The CFTC tracks futures positions of small speculators, large speculators such as money managers and commercial hedgers, including companies that work with the commodity.

When petty speculators get too optimistic about gold, Williams says it’s often a sign that it’s about to peak. Conversely, gold tends to be near a bottom when petty speculators get too bearish.

The Commitments of Traders data, at the bottom of the chart, shows that small speculators are in their smallest long position since May 2019 – just before there was a major gold rally. Also worth noting is that during the recent gold spike in March, small speculators had their largest net long position in four years.

Stock Selection and Investment Trends from CNBC Pro:

While this doesn’t mean that investors should always do the opposite of what petty speculators do, it’s a sign that gold could gain soon, according to Cramer.

“That would be too lenient, but he points out that over the last 9 years, when their net long position in gold has been this low, the actual metal has risen. And the best selling points have all come at times when they were big long positions,” said Cramer.

Source link

Leave a Comment