Related Topics
Metals , ETFs , Investing

Gold: A Lesson from Mom and Pop

What you can learn about gold’s future trend by watching small traders

by Bob Stokes
Updated: May 23, 2019

What "mom and pop" do in the gold market is instructive. Heed the lesson and do just the opposite.

At least, that's what our observations over the years have taught us.

"Mom and pop" is a term for retail investors. A little over a year ago, they were gung-ho for gold.

This is from a March 20, 2018 article (Kitco):

Gold Investors Piling Into ETFs...

Holdings of gold by global exchange-traded funds have risen to a multi-year high...

Well, mom and pop were not very happy with what happened next.

The Jan. 25, 2018 high of $1366.38 dropped to $1160.24 by Aug. 16, 2018, a 15% decline.

Yes, gold did rebound, but prices once again slipped -- this time from a Feb. 20, 2019 price of $1347.11.

Our March 11 U.S. Short Term Update provided perspective with this chart and commentary (wave labels available to subscribers):


Small traders in gold futures, which represent the Mom-and-Pop retail trade, have increased their net-long position as a percentage of open interest to 5.33%, the highest level since 5.65%, which was shortly after the top [on Jan 25, 2018]. Small Traders chase the trend, becoming more bullish as prices rise and more bearish as prices decline. Their position size usually reaches an extreme in gold at or shortly after a trend reversal.

Our May 20 U.S. Short Term Update once again discusses the retail trade in gold -- and provides a chart of gold's anticipated price path -- according to the Elliott wave model. Plus, subscribers get specific gold price targets -- straight from Chief Market Analyst Steve Hochberg.

Learn how to get instant access to this gold analysis without any obligation -- just below.

Gold and Silver Myth: BUSTED!

Here's the myth: Precious metals are perfect hedges against an economic downturn.

Here's what you need to know: The historical DATA contradicts this widely held belief -- not once, not twice or thrice -- but repeatedly.

Yet, the historical record DOES show that the chart patterns of gold and silver DO follow the Elliott wave model.

Learn what our Elliott wave experts anticipate next for precious metals via a 30-day, risk-free trial.

Find out how to get started -- just below …

Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:



Subscribe now and read the current issues.



Fine-tune your portfolio plan.



Relax. Watch the markets with your targets in mind.

Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns

Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:

Here's what you get with the Financial Forecast Service

Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

3x Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.

Start Your Subscription Now


for 1 month of unparalleled market insights