Morning Gold/Silver Market Report Gold and silver staged big upside reversals on Friday after the US jobs reports showed fewer jobs gained in the month of October than analysts were expecting. The reports showed only 214,000 new jobs, which was short of the 220,000 to 240,000 expected, and that resulted in a modest break in the Dollar and a dramatic reversal in gold and silver. In fact, December Gold traded to new contract lows early and rallied almost $49 off the lows. Likewise, December Silver rallied 84 cents after trading to new contract lows. Clearly both of these markets had gotten oversold after taking a beating over the last two weeks from the strengthening Dollar, weaker crude oil and the idea that inflation was nowhere in sight. More verification that the market was oversold came from the COT report on Friday afternoon, which showed the spec net long position in gold falling to one of its 4 or 5 lowest readings since 2003. The report showed non-commercial and non-reportable traders combined holding a net long position of 53,882 contracts as of last Tuesday, a decrease of 48,190 on the week. Back in July, the net long was up at 183,000! The spec in silver are just about even, as Fridays report showed non-commercial and nonreportable traders combined traders held a net long position of 7,044 contracts, a decrease of 2,177 on the week. Fridays low at $1,130.40 was below what is considered to be break-even for most South African mining companies. The worlds largest gold ETF saw their gold holding fall by 5.68 tonnes on Friday, and have now fallen to their lowest level since late September of 2008. With a slight deflationary bias to start off slack Chinese inflation readings, a major shipping company failure and increased fighting in the Ukraine, the precious metals will have to face some thick overhead resistance especially after the sharp short covering rally at the end of last week.
Posted on: Mon, 10 Nov 2014 12:59:17 +0000
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