Gold is due a major correction

As the price of gold inches up again, John C Burford sees a major sell-off in the charts. Here he explains how to play it.

Today I want to write about gold. Because I believe we are in the process of making my long-awaited major turn. And I wanted to explain exactly why I think we could soon see a major sell off in gold.

Previously, I have highlighted the crowded trade nature of the market and have been looking for short entries.

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Contracts of 100 Troy ouncesRow 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 480,908
Commitments
239,43431,10826,727136,250405,520402,411463,35578,49717,553
Changes from 25/9/12 (Change in open interest: -8,608)
5,4401,010-5,914-8,256-1,341-8,730-6,245122-2,363
Percent of open in terest for each category of traders
49.86.55.628.384.383.796.416.33.6
Number of traders in each category
22455684847302148Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.