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Gold price, silver price ‘know no bounds’: Commerzbank

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(Kitco News) Gains in gold and silver are becoming excessive, writes Commerzbank. “The prices of gold, silver and co. still know no bounds,” says Commerzbank analyst Carsten Fritsch. December gold price is seeing a new all-time high of $2,081.80 an ounce and September silver is seeing its more-than-seven-year high of $28.54 an ounce. “The gold/silver ratio has dropped as a result to 74, its lowest level in more than three years. Gold has gained by approx. $250 since mid-July, while silver has soared by 45% during the same period,” notes Fritsch. Despite some solid drivers supporting the precious metals, including weaker U.S. dollar and negative real interest rates, their surge upwards is becoming excessive, the analyst writes. “This is also indicated by the extremely high RSI of 89 for gold. The RSI for silver is only marginally lower at 85. This makes a correction increasingly probable,” Fritsch says. Speculative interest is also looking high in silver, which could be a sign of an upcoming correction. “Whereas gold ETFs are continuing to register inflows – of just shy of 9 tons yesterday, matching the previous record of 29 days of uninterrupted inflows – silver has seen outflows on four consecutive days recently. The fact that the silver price is continuing to rise nonetheless could be an indication of pronounced speculative interest. This would also suggest that the potential for correction is considerable.”

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