The bull camp has to be disappointed by the fact that developing dollar weakness at the end of last week was not enough to cushion gold and silver and that same trend is in place again early today. In fact, from a technical perspective, the action in the gold this morning leaves the market vulnerable to a retest of the early April lows.

Apparently some gold bulls are discouraged by the ongoing optimism toward equities which suggests further rotation away from gold this week. Fortunately for the bull camp, the latest positioning report showed a fairly balanced spec and fund long positioning and with the market sitting $18 an ounce lower than the COT report mark off level, the spec long reading is probably overstated.

Gold positioning in the Commitments of Traders for the week ending April 9th showed Managed Money traders were net long 55,737 contracts after increasing their already long position by 16,579 contracts. Non-Commercial & Non-Reportable traders were net long 146,443 contracts after increasing their already long position by 22,290 contracts on the week.

As suggested already, we lean bearish toward gold with the inability to hold $1,292.90 this morning setting the stage for a quick downside extension to $1,284.90.

Similarly the silver market also showed only a modest rejection of last week's spike down washout leaving the charts tilting in favor of the bear camp. In retrospect, silver's inability to benefit (in fact, it lost ground) in the face of bullish Silver Institute supply and demand analysis has to discourage the bulls and encourage the bears.

While the most recent positioning report probably overstates the net long in silver, it remains at a high enough level to suggest the market remains vulnerable to further stop loss selling. The April 9th Commitments of Traders report showed Silver Managed Money traders are net short 2,473 contracts after net selling 694 contracts. Non-Commercial & Non-Reportable traders were net long 37,617 contracts after increasing their already long position by 3,697 contracts.

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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.