While the charts in gold and silver have favored the bear camp for 5 trading sessions, a hook up in the gold market this morning has caught the bear camp leaning in the wrong direction. We suspect that part of the recovery is the result of news that the US will leave tariffs in place until the US has proof of compliance with the phase 1 agreement (possibly after the November elections).

However the Chinese are apparently okay with that development as there does not appear to be a cancellation of the official signing today.

Limiting the gold and silver rallies this morning is the fact that both gold and silver ETFs reduced their holdings yesterday. Gold ETF holdings were reduced for a 5th straight session, bringing this year's net sales up to 439,026 ounces while silver holdings were reduced by 1.46 million ounces bringing this year's net sales up to 6.87 million ounces.

Physical supply-side news overnight was mixed with Hochschild Mining raising 2020 production and Eldorado 4th quarter production merely meeting company estimates.

While not significant, gold might see some minimal support from a modest failure in the dollar below a base of support built above 97.00.

Apparently, the trade is seeing some speculative buying off the idea of some last minute breakdown in trade talks or they are pricing in some impeachment fireworks and or the market expects producer prices to mirror US CPI with anemic results.

On the other hand, the markets have now seen 2 different key US data points recently that effectively extend the duration of the US Fed's "on hold" status and that should eventually help to cushion precious metals prices.

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