On the heels of some fierce trading last week in the dollar, gold and silver, below is an extremely important update on the war that is raging in the gold and silver markets.
The following charts are from Jason Goepfert at SentimenTrader.
Commercial Short Positions In Silver Hit All-Time Record Highs!
King World News note: Below you can see that the commercial hedgers short positions in the silver market market have now hit another all-time record (see remarkable 23-year chart below).
Continue reading the KWN piece below…
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The commercial shorts are at a level (real-time) that raises serious concern. As stated earlier, the commercials now have their largest all-time short positions in history. The last time the commercials held close to this large of a short position in silver was in 2004. Again, that does not mean that the price of silver cannot head significantly higher in the short-term.
What is important to note on the chart above is that when the commercials were this short silver in 2004, there was a brief 12.7 percent pullback in the price of silver, but over the next 18 months the price of silver more than doubled from the low of that pullback in 2004. So from late November of 2004, when the price of silver fell to about $6.70, the price of silver soared to $14.31 by early May of 2006. Nevertheless, the commercials now all-time record short bets against silver and that is something that traders and investors should watch closely.
Commercial Short Positions In Gold Also Near All-Time Record Highs!
King World News note: Below you can see the commercial hedgers’ short positions are also near an all-time record in the gold market (see 10-year chart below).
King World News note: Again, sometimes it’s important to take a step back and look at the big picture in the gold market (see fascinating 23-year chart below).
The commercials were never this concentrated in terms of their short position in gold until about 2010. After that, gold briefly pulled back in 2010 but then went on to surge a staggering $800 over the next 20 months. This means there could still be a lot of room to the upside in the gold market, but the current leg of the advance is in a danger zone in terms of the commercial short position in gold.
Sentiment in the silver market has recently reached the “Excessive Optimism” levels (see 10-year chart below).
However, note that sentiment in the silver market reached the “Excessive Optimism” levels many, many times on the long-term chart during bullish advances. So this is normal and healthy, especially during bull markets, even though it waves a caution flag in the very short-term (see 23-year chart below).
It would appear that the endless talk about the massive commercial short positions in both metals coupled with the bullish advance coming on the heels of a brutal 5-year cyclical bear market is keeping a healthy level of “fear” in the early stages of the newest leg of the bullish advance. So it will be very interesting to see how gold and silver trade from current levels in the days and weeks ahead.
***KWN has just released the incredible audio interview with London metals trader Andrew Maguire and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Also Just Released: Peter Boockvar – What Is Really Happening In China May Surprise People Click Here.
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