A Look At The Big Picture Of The War In The Gold & Silver Markets

With gold and silver surging along with bonds and stocks trading a bit weaker, today King World News wanted to take a look at the big picture in the war in the gold and silver markets. There is also a note from Art Cashin that is included below.

Even with today’s rally in gold taking the price near $1,230, remarkably there are now actually 1% fewer bulls in the gold market than there were at the bottom of the 2008 collapse low near $700. So even though the price of gold is about $525 higher, there are fewer bulls now than there were at the bottom of the global collapse…

Sentiment on silver is even worse, with roughy 15% fewer bulls than when the price of silver bottomed at $8.80 in 2008. So even though the price of silver is about 72% higher, sentiment in the silver market is far worse than it was at the 2008 collapse lows.

What Does It All Mean?

What this means is that despite the large commercial short positions, both gold and silver continue to climb a “wall of worry” in the early stages of this new bullish phase inside of their secular bull markets. This makes watching the war that is taking place so fascinating because up to now commercial traders have not been able to smash the price of both metals as easily as they were able to during the cyclical bearish phase that recently came to an end. For those looking to accumulate physical gold and silver, when you are in a bullish phase simply use any significant price weakness to add to your existing positions, because in bull markets all surprises happen on the upside.

Also of importance…

Here is a portion of today’s note from Art Cashin: Overnight And Overseas – The IMF’s Christine Lagarde made some cautionary remarks on the fragility of the global economy. That seemed to put some icing on market weakness that seems to be moving around the globe.

In Asia, Tokyo got whacked as the yen soared again. Financials got hit on rumors that the BOJ would take negative rates deeper into negative territory. India sold down as did Australia and Hong Kong. Shanghai was odd man out, rising 1.5%.

There’s plenty of red ink in Europe despite a slight weakening in the euro. Financials are hit there too as they also see more talk on negative rates.

In commodities, gold is up but copper makes another low. U.S. bond yields are down a bit. Crude looks like it is slipping. U.S. futures are down also.

Consensus – Crude remains at center stage. The markets in Europe are setting up a negative pattern that could be troublesome as talk of Brexit grows. Stick with the drill – stay wary, alert and very, very nimble.

KWN
April 05, 2016