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$1,280 -- Here We Come

Commentaries & Views

The struggles for gold continue, as commercials are short the metal in record numbers. Interestingly enough, their short position in silver has never been this small. The commercials aren’t always right, but it’s hard to fight them because of the amount of capital they have at their disposal.

Gold remains weak and every rally is met by sellers, with gold making lower highs and lower lows, indicating the next big move is lower. Resistance appears to be $1,316 to $1,320, while support comes in at $1,300 and then $1,280. The strength in the dollar is a contributing factor in the pressure on gold, but there is more to the story and $1,280 is in play.

On the other hand, silver looks to be at a support level and is headed for $17. The gold-silver ratio is stretched once again, trading at 81. Expectations are for the ratio to fall below 70, making the short-gold, long-silver trade attractive.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.