After the precious metals advanced solidly off the recent lows, commercial hedgers made major moves in the gold and silver markets.
It Was Fun While It Lasted
October 19 (King World News) – Commercials are now net-short the gold market for the first time in many weeks. Below you can see the commercials being net-short gold without the data from this week’s action being reflected yet (see chart below).
First Time In Many Weeks Commercials Pivot Short Gold!
It will be very interesting to see next week’s report…
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Long-Term Chart Still Bullish Gold
Bullion banks and commercial hedgers have been taking the other side of the trade (from hedge funds and small speculators) for quite a long time. Even though commercials had a big shift this week and are now net-short gold, they are still in a bullish posture when you take a long-term look at the gold market (See chart below).
24 Years Chart Of Commercial Positioning In Gold!
After being long the silver market for the first time in history (for many weeks in a row), the commercial hedgers are now net-short silver. Here is a look at the past decade of commercial short positions in the silver market (see chart below).
Commercial Hedgers Now Net-Short Silver
Here is a long-term look at commercial short positions in the silver market, which shows commercial hedgers are still very bullish on the price of silver from a historic perspective (see chart below).
Commercials Still Bullish On Silver – 24 Year Chart Of Positions!
We have already witnessed large scale capitulation in the gold and silver markets, both in the precious metals and the underlying shares of the high-quality companies that mine and explore for the metals. We may have already seen the bottom of the gold market when it hit $1,160 in overnight trading in Japan during the final stages of the brutal takedown. So $1,160 will be the key number to watch in the short-term. For those who are taking advantage of this historic capitulation, the odds continue to greatly favor a major upside reversal.
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