Gold and silver ended up near unchanged overnight after pressing a bit lower in the wake of last week's selloff. Both markets did enough technical damage last week to suggest they could continue to see pressure for the first part of this week.
Strong economic data last week countermanded concerns over the US/China trade dispute and the increasing worries about conflict in the Persian Gulf.
Chinese media took a hardline approach to the trade talks late in the week, but that failed to deter a boost in risk-on attitude that accompanied strong US economic data.
US housing starts, initial jobless claims and the Philly Fed survey all came in higher than expected Thursday, and then on Friday US consumer confidence came in at 15-year high.
President Trump seemed to dial back talk about potential US actions in the Persian Gulf on Friday, but his tweets over the weekend seemed to ratchet up the threats. The market's attitude about that situation could change very quickly, as could its concerns about US/China trade, but the momentum seems to favor the bear camp at the moment.
The dollar had a strong week last week, trading to its highest level since May 3rd and within striking distance of its 2-year high from April 26th, and this helped drive gold and silver lower as the week progressed. July silver traded to its lowest level since November 30th last week and was only 20 cents away from its contract low from mid-November.
Friday's Commitments of Traders report showed managed money traders were net buyers of 46,201 contracts of gold for the week ending May 14th, bringing their net long to 65,922. Non-commercial & non-reportable traders were net buyers of 40,567, bringing their net long to 141,003.
This data was collected on Tuesday, which was the day the market peaked. Now that the market has fallen $51 from Tuesday's close, it's possible that the managed money position is nearly flat, possibly net short.
For silver, managed money traders were net sellers of 53 contracts, bringing their net short to 14,946. Non-commercial & non-reportable traders were net sellers of 4,644, reducing their net long to 10,321.
The market having fallen another $42 since the data was collected and is now approaching contract lows, but open interest has climbed only 1,100 contracts during that time frame. This suggests that this break is not bringing along much new selling.
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