As we come to the end of the first week of trading in the month of December, there has been commercial and bullion bank short covering in the gold and silver markets.
The following charts are from SentimenTrader.
The commercials have continued to cover short positions in the gold market (see chart below).
The commercials have also covered additional short positions in the silver market (see chart below).
The COT report has not moved into a bullish position as of yet because the commercials are still very net-short gold and silver on a historic basis, but it is possible the gold and silver markets have seen their bottoms. We will have to see how the metals trade in the coming weeks and if they can break out of their respective downtrend channels. Regardless, the sentiment is extremely negative and that is very bullish from a contrarian perspective. If you are accumulating physical gold and silver, just continue to purchase at the normal times each month if you are dollar cost averaging. Stay disciplined and don’t try to outsmart the market.
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