#Gold & #Silver

There is great physical demand in gold and the yellow metal would trade substantially higher if the central banks wouldn't hold it back by selling into the market.

Technically oriented investors want to see US$ 2'070 per ounce, on a closing basis, to give a clear buy signal. Breaking through US$ 2'070 would indicate that the consolidation period since summer 2020 would be over. A first up-move should carry the gold price 10% higher.

 

As per last Friday spot gold closed in New York, 4 p.m. at US$ 2'053.00 per ounce, up US$ 33.10 from

a week prior. Attachment 5 displays the spot gold trading pattern for the last 3 trading days.

 

The Proprietary Cycle (attachment 6) is up. The cycle indicator is a tool, which provides an idea

at which direction investors should be positioned in the short-term.

 

Attachment 7 shows the daily chart of the largest ETF investing in gold shares, VanEck Vectors Gold

Miners ETF, GDX, US$ 31.56, up 2.0% from last week. The index has broken out on the upside from

a consolidation period since August 2023 (lower chart). And it is now outperforming the gold bullion

(upper chart).

 

In silver, large speculators (hedge funds and money managers) reduced their long positions by 5.5%  and reduced the short positions by 16.0%. Commercial silver dealers reduced their long positions by 3.5% and left their short positions unchanged. The net short position of the Commercials increased to 48'800 from 47'500 the prior week.. This is still a very large net short position (attachment 8).

 

The 30-minute silver spot price chart (attachment 9) reveals silver prices made the low last Monday,

December 18 at US$ 23.66 per ounce and the high last Friday at US$ 24.60. There were several attacks

during the week but not really successful. Last Friday, after hitting the high, the silver depressing team moved the silver prices in a hurry down to US$ 24.09.

 

The weekly silver chart is forming an Inverse Head and Shoulder formation with a resistance level at

US$ 26 per ounce. Once cleared the price will move very fast to US$ 28 (attachment 10).

 

The Global X Silver Miners ETF, symbol SIL, US$ 28.94 was up 3.8% (attachment 11).  This is the largest ETF investing in so-called silver stocks. The Point&Figure chart (attachment 12) indicates SIL is still far away from US$ 50 achieved in early 2021.