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Gold is Ready for Lift-off, Silver Also

Commentaries & Views

Precious metals have reached oversold levels once again. The last time gold reached this technical juncture, was in November 2018 with the price at $1209. Gold then rallied for 3 months and tacked on $120.00. At the same time silver rose from $14.15 to $15.90.

Let’s take a lot at some charts.

Featured is the daily gold chart. Price found support at the bottom of the large flag. The supporting indicators are ready to turn positive. The first target is at the blue arrow. A breakout there will turn the trend bullish.

Featured is GDX the miners ETF. Price is testing the bottom in this declining wedge pattern. A breakout at the blue arrow will confirm a bottom. The first target is at the green arrow. The supporting indicators are ready to turn positive (green support lines), and the moving averages are in positive alignment (green bar).

This chart courtesy COT@softwarenorth.com shows commercial gold dealers were 'net short' 57,000 contracts on April 23rd. As a percentage of open interest the number was quite bullish at 13%. It is probably even more bullish now, due to a lower gold price since April 23.

This chart courtesy goldchartsrus.com shows silver is steadily being accumulated into trusts and ETFs. The number of ounces backing SLV rose an impressive 3 million on May 2nd, to 314.8 million.

Featured is the silver chart. Price is carving out a bullish falling wedge. The supporting indicators are at support levels. A breakout at the blue arrow will confirm a bottom.

This chart courtesy COT@softwarenorth.com shows commercial silver dealers were 'net short' 20,000 contracts as of April 23rd. As a percentage of open interest the number was quite bullish at 9%. It is probably even more bullish now, since silver dropped in price since April 23rd.

DISCLAIMER: Please do your own due diligence. Peter Degraaf is NOT responsible for your trading decisions.

Peter Degraaf is an investor with more than 50 years of experience. Google him or visit his website at www.pdegraaf.com

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.