Gold and silver dropped hard into support zones. Silver’s support zone meant only everything, and thus far it holds. I am not sure to what degree Ukraine hype plays into this. What, was Ukraine not going on a few hours ago when the metals got hammered in London? Anyway, we can chase hype around forever but the fact is that these metals hammered projected support zones and bounced this morning. Time to be paying attention to what they do now. Here’s silver…
Among its 29 pages of high quality market analysis, this week’s NFTRH (#287) reviewed the Commitments of Traders (CoT) structures of a few markets and their implications.
The above CoT graph clearly shows that gold has declined as the structure improved (red arrows). It then bottoms with the circled extremes and rises in conjunction with a degrading structure (green arrows). Gold is still on its journey toward bottoming.
CEF’s net asset value does not imply that the bugz are over bullish. Quite the contrary. It is selling at a decent discount to net assets and could be viewed as a long term value for those who don’t think that precious metals have gone the way of the Dodo Bird.
So as lame as the precious metals (esp. silver) have been acting, this is one for the bulls because it sure is not concerning that gold bugs are not putting their money where their convictions are.
Gold: Goons cover shorts, get less long. Large spec’s sell and get short. That means another incremental improvement this week.
The 10 vs. 2 year yield spread dropped, which was an in-day negative not to be given undue weight based on one day, but to be respected none the less. Interestingly, the sector went nowhere (GDX) to down (GDXJ, gold, silver) yesterday as the spread popped. Today spread down, sector up.
We should watch volumes today to see if there is enough conviction to get GDX, GDXJ and high profile individual miners above the moving average clusters they recently fell below. I’ll try to get a review of that after the market closes, assuming today stays positive.
Well, let’s just say that the baby trend continues in silver vs gold…
If silver takes leadership in the precious metals well, you know how that goes. I have bought, held and added to a silver bullion fund over the last few weeks and it has not been fun. But I did not think of selling it because silver has not broken critical support and the ratio above appears to be holding support as well.