Net commitments of Futures Traders show that large speculators (hedge funds and money managers) have reduced their long positions. Net commercial gold traders have reduced their short positions. Both sides are currently not heavy committed in the gold futures market (attachment 1).
The Gold Barometer (attachment 2)reveals that gold stocks are currently overbought. However, the physical gold and silver is in neutral territory.
The KITCO Gold Survey indicates that Wall Street and Retail Investors are bullish this week (attachment 3).
Commitments in silver trading shows that large speculators have increased their long positions. Net commercial silver dealers have increased their short positions. Historically these positions are very large and have reached the level of August 2016. We are unable to explain why the commitments in silver versus gold are so different.
We attached (5) the silver long term Point&Figure
chart. As can be seen silver is probably forming a
large 5-year Reverse Head&Shoulder Formation
with a neckline at US$ 22 per ounce. This pattern is
much more bullish than the long term chart of gold.
But the word is not short term but medium to long
Gold is in the vault of the Central Banks, hence it is a monetary reserve. In extreme economic situations gold served as safe haven for investors or got confiscated by governments. Most governments don't own any silver anymore. We don't believe that in extreme economic situations silver would be confiscated. In the modern world silver has become also an industrial metal.
Attachment 6 shows the gold/silver ratio. The chart shows that the ratio fell in spring 2016 out of an uptrend channel. In other words investors need to buy less ounces of silver for 1 ounce of gold. This is telling you that in the medium to longer term silver is more bullish than gold.
Silver producer should seek to acquire more silver mines. Unfortunately they have done exactly the opposite lately, acquiring gold mines.
The hourly gold chart (attachment 7) indicates that gold traded during the week between US$ 1,220 per ounce and US$ 1,242 per ounce. As per the close in New York last Friday at 4 p.m. gold traded at US$ 1,235 per ounce for a gain of US$ 2.00 per ounce on the week.