The charts in gold and silver remain in favor of the bear camp today, with general geopolitical calm seen on both the Middle East and trade fronts.

Gold did see a measure of support from a bit of confusion on the date of the US/China trade deal signing. Apparently the President indicated the signing would take place "shortly after January 15th) and that seemed to suggest a possible delay.

The market might also be seeing some residual support from Iranian commander comments yesterday alluding to the potential for future attacks but in general, there doesn't appear to be a fuse available to light the bull case today. However, the US nonfarm payroll report could provide a measure of volatility in the event that the readings are softer than expected as that would rekindle some economic uncertainty.

In a sign of waning market bullishness, both gold and silver ETFs saw liquidations of holdings yesterday with the net sale of 91,085 ounces of gold lowering this year's net purchases to only 4,902 ounces. It should also be noted that silver ETFs now have net sales of 2.49 million ounces so far this year.

While the gold market has not paid that much attention to classic supply-side fundamentals the trade was presented with news of a 33% annual increase in second half 2019 gold production from DRDGold but that overall production level wasn't overly significant at 3,037 kilograms. In fact that minimally negative news was offset by Evolution Gold news that their full-year gold production would come in at the lower end of their production forecast for the year around 725,000 ounces.

While not a significant factor there have been more South African power problems this week and that could result in some lost gold output in future supply readings.

A developing negative for gold and silver prices is seen from the extension of gains in the dollar back to the highest levels since December 26th!

From a technical perspective, the February gold contract continues to show some attraction to the $1550 level thereby providing the bulls with some confidence and in turn that tempers the aggressive bearish sentiment in place in the prior two trading sessions.

While the COT positioning report released after the close today will probably not see the impact of the Wednesday explosion on the upside we suspect the spec long positioning adjusted for the highs this week would have resulted in a new record high long. Therefore, the threat of further stop loss selling should not be understated and traders should view the Thursday low of $1,541 as a potential inflection/pivot point where another wave of panic selling could be seen.

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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.