Aside from the legitimate, but largely irrelevant for the sake of this post, reasons including this morning surprisingly weak service data, in which both the ISM and the Markit PMI reports confirmed that the "malaise in manufacturing has spread to services", JPM's recommendation to sell stocks and buy gold, and the fact that slowly but surely the world is being flooded by negative rates, here are the two most actionable reasons why gold just broke out and soared to $1,260, and is fast approaching levels not seek since January 2015.
First, here is Goldman's Jeff Currie telling CNBC's viewers just two weeks ago to short gold: "we maintain our view of rising U.S. rates and hence lower gold prices with a 3-month target of $1,100 (per troy ounce) and 12-month target of $1000 (per troy ounce)" not to mention Goldman's October 14 summary that gold is a "slam dunk sell."
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But perhaps even more important, was the greenlight for the spike higher from none other than Dennis Gartman. Recall just yesterday, in a note in which Gartman said "We Were Stunningly, Shockingly, Stupidly Wrong", he also had the following good news for gold longs:
... because we respect “reversals” in equities and commodities, the fact that the shares of the largest gold mining operation in North America opened higher and then closed lower upon the day, taking out and closing below the previous day’s lows… an “outside” reversal as they are known… we ran to cover our US dollar denominated gold position mid-day and we shall argue strongly that those still long of gold in US dollar terms, as noted above, should do the same.
To which we added: "Or the opposite, if they actually want to make money."
And sure enough...