While gold prices yesterday didn't range up sharply as was seen at the end of last week, they have posted another fresh higher high and that extends technical and fundamental optimism into the second trading session of the week. Not surprisingly, modest weakness in the Dollar has provided the brunt of the lift in gold and silver, but it is also possible that selling in the global equity markets is adding to the pre-existing bull case from last week.
It should be noted that the Dollar has re-damaged its charts again this morning and the bull camp should also be emboldened by the wide range of legal charges against Huawei as that increases political tensions into the upcoming trade meeting! Other issues that should provide the bull camp with ammunition came from word that China officially added to gold reserves as part of a "shift" of away from US Treasuries. In fact the press is reiterating a recent story about China adding to gold reserves for the first time in two years, but that story has been enhanced by suggestions that the Russians have also made similar shifts in their central bank holdings.
Supposedly the People's Bank of China added 10 tons of gold reserve holdings over the prior month at the same time that Chinese holdings of US treasuries fell for the fifth straight month and they reached the lowest levels since May 2017. Yet another supportive development overnight came from India where last week's story of increased wedding season buying was confirmed by local jeweler buying. In a surprising development overnight the silver market saw an in-depth bullish article on the long term contraction in global silver supply with the demand side of the equation also given fresh life by the assertion that demand is starting to rise beyond jewelry use.
It should be noted that silver has had a deficit for a number of years but the market has not seen that situation as overly important as demand has showed only incremental gains. In short it is possible that the bullish condition in silver might finally be embraced by the world! While the silver market last month forged the biggest monthly gain in two years March silver prices remain more than two dollars per ounce below the January 2018 highs!
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