With the charts damaged again overnight, it would appear as of the escalation of political uncertainty in Washington is not capable of cushioning the downward bias. However, action in the dollar has discouraged some buyers of late and one gets the sense that fears of deflation are circulating within the marketplace due to a long list of geopolitical/economic issues producing economic headwinds.

In other words, some traders/analysts fear that political, trade and economic issues won't cause excessive uncertainty but instead will simply slow growth.

However, the bull camp has the ongoing evidence of persistent investment inflow to an ever-expanding list of precious metals derivatives. In fact, Gold ETF's on Friday increased their holdings for the 10th straight session bringing this year's net purchases to 10 million ounces.

Furthermore at the end of last week State Street Global Advisors and the World Gold Council pegged SPDR gold mini-share-holdings to have passed the $1 billion level in roughly one year. In our opinion, seeing inflows into an instrument for smaller investors at the same time that world central banks are adding to their gold reserves points to the best physical demand environment in gold since the early 1980's!

Certainly the bull camp relies on safe haven/flight to quality capital inflows for large compacted gains in prices, but we suggest the classic supply and demand fundamentals should facilitate a longer extension of the bull markets in gold and silver that began in late May.

Unfortunately for the bull camp, the latest positioning report in gold showed a vulnerable positioning but that positioning has been brought down moderately with the post report mark off decline of $49 (into the low this morning).

Similarly the silver market also has a vulnerable spec and fund long positioning but that positioning has probably been reduced with the post COT report slide of $1.38.

The September 24th Commitments of Traders report showed Gold Managed Money traders hit a new extreme long of 292,066 contracts. Managed Money traders were net long 292,066 contracts after increasing their already long position by 30,188 contracts. Non-Commercial & Non-Reportable traders net bought 27,278 contracts and are now net long 392,004 contracts.

The Commitments of Traders report for the week ending September 24th showed Silver Managed Money traders net sold 3,882 contracts and are now net long 50,634 contracts. Non-Commercial & Non-Reportable traders are net long 85,369 contracts after net buying 157 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.