While the dollar is lower to start today we doubt that is the primary catalyst for the somewhat impressive initial rally in gold prices. In fact noted strength in crude oil from news that the US will "eliminate" waivers for countries importing Iranian oil has provided all commodities with a lift.

Gold might garner some additional lift from the fact that Russia expanded its gold holdings in March. The market might also draft some support off Chinese official comments that were reportedly cautiously optimistic toward their economy and it is also possible that the bombings in Sri Lanka have added in a measure of political safe haven interest.

Unfortunately for the bull camp ETF's continued a recent pattern of selling at the end of last week. In fact last week ETF's liquidated 528,200 ounces of gold and 1.27 million ounces of silver. However the most recent positioning report in gold has seen the net long brought down sharply over one week and that could increase the chance of respecting solid value at the $1275 level on the charts.

The April 16th Commitments of Traders report showed Gold Managed Money traders net sold 59,706 contracts which moved them from a net long to a net short position of 3,969 contracts. Non-Commercial & Non-Reportable traders were net long 80,414 contracts after decreasing their long position by a large 66,029 contracts.

With some press outlets noting gold's relative expensive standing to silver (the gold/silver ratio reached a 25 year peak) one might expect silver to pick up some speculative buying interest but reports of a possible sharp decline in Indian silver exports because of a scandal could provide a demand glitch ahead.

However spec long positioning in silver contracted sharply last week and is now only minimally vulnerable to stop loss selling. The April 16th Commitments of Traders report showed Silver Managed Money traders net sold 8,365 contracts and are now net short 10,838 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 15,139 contracts to a net long 22,478 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.