Silver Speculators Go Short – Which Is Extremely Bullish
The comments above & below is an edited and abridged synopsis of an article by John Rubino
Recent commitment of traders (COT) reporting for gold and silver offered more of the same: The gold futures action is boring, and the silver futures action is strange and exciting.
Starting with gold, the large speculators—who tend to be wrong at big turning points—got a little less optimistic, while commercials—who tend to be right at big turning points—did the opposite. But both groups are still in unfavourable territory, with the speculators too long and the commercials too short, which is not good short-term news for gold.
Silver is a whole different story, with speculators going aggressively net short, something seldom seen, and commercials almost in balance, which is also unusual. Looked at in a vacuum, this is hyper-bullish.
Between trade wars, massive ongoing government deficits and spiking stock market volatility, the reasons for owning safe haven assets like gold and silver are both multiplying and gaining urgency.
Which brings us to the $1,360 gold resistance level. Since 2014 this has been where gold rallies die. The recent pop brought gold back to within striking distance, once again raising the question of who feels compelled to sell before $1,400 and why.
One of these days gold will blow right through on its way to some much higher pocket of resistance. And based on the tide of chaos that seems to be engulfing the world, it might be wise to start acting as if the next leg up is imminent rather than just inevitable.
A year is coming (or maybe has arrived) when financial reporters doing their annual winners and losers articles will be shocked to find a list headed by precious metal miners, silver bullion and gold bullion.