With optimism regarding a trade deal and Brexit fading, the risk-off mood has waned and has allowed a modicum of support to the precious metals. Secretary of State Pompeo's comments yesterday that President Trump would reject any trade deal that is "not perfect" sent up a caution flag. And although strong US economic data strengthened the dollar a bit yesterday, the trade was reminded that not too long ago it was excited about the Fed stepping back from raising rates and that there has been no indication of a change in their posture on the issue.
Gold fell to its lowest level in five weeks Tuesday, but that event did not usher in a sharp selloff, suggesting that the market had gotten a bit oversold on the reaction to the positive trade news over the past week, especially with an agreement not yet settled.
May silver pushed to a new low for the move as well, but it did not follow through on the downside either. Police have been called in to the Sibanye-Stillwater mine in South Africa on concerns about violence, which could be supportive to gold and platinum.
The CFTC continued to play catch-up with the Commitments of Traders data on Tuesday with a report showing the data as of February 26th. This Friday (with data as of Tuesday) they will be back on schedule. Tuesday's report showed managed money traders were net sellers of 4,481 contracts for the week ending February 26th, reducing their net long position to 104,230.
Non-commercial & non-reportable traders combined were net sellers of 6,113 contracts, reducing their net long to 186,259. For silver, managed money traders were net buyers of 8,929 contracts, bringing their net long to 48,313. Non-commercial & non-reportable traders were net buyers of 2,537, bringing their net long to 78,247. The data was collected prior the last week's steep selloff, so we suspect that the net longs are much smaller by now.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
