zondag 28 september 2014

Gold and Silver Bullion in Heavy Demand

In the previous week, precious metals investors have seen gold and silver prices plunge due to heavy shorting as we can see in the most recent weekly COT report (charts below created by Correlation Economics). The probability of a short covering rally has increased tremendously.

What is most interesting to see here is that the silver market is leading the gold market with some unseen events in the silver market. For example, on September 21, we saw heavy volume to the downside in after hours trading in the Silver Trust (SLV). This is very unusual as we have never seen such high volume before in after hours (see chart below by Netdania.com).

The unintended consequences from these takedowns are very pronounced when we look at gold and silver bullion demand, the premiums and the declining stock levels in Shanghai.

To read the analysis, go here.

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