Saturday, July 22, 2017

Capitulation may have finally hit gold and silver markets as prices rising at time of near record short positions

With gold prices rising $24 to close at $1254 for the week, an interesting trend appears to be forming which forecasts that traders may have finally reached the point of capitulation, and where prices should be ready to go much higher.

This capitulation is often derived from when a market has mostly sellers, and the sentiment for the asset class is primarily negative.

The gold futures and silver futures short positions held by speculators have rocketed up to extremes in recent weeks. These elite traders are aggressively betting for further weakness in gold and silver prices. But history has proven extreme shorts are a powerful contrarian indicator. Right as speculators wax the most bearish as evidenced by their collective bets, gold and silver decisively bottom and birth major new rallies. - Seeking Alpha


The Comex gold / silver future is very much like a show. In a good drama, there must be both good guys and bad guys. No matter what roles the people play, they get paid from the same boss. In the paper PM markets, don't just think the bullion banks are the manipulators and the hedge funds, who are always full of longs in their hands, are the victims. Both are parts of the drama. Perhaps, what we see in Comex now is just a change in the script. All of a sudden, people find that the bad guys, after all, are not that bad. However, at the same time, they also find that the good guys are not really that good.

Post a Comment