Saturday, May 13, 2017

Gold and silver appear to have reached a bottom as record amount of short covering has taken place

The recent beatdown in the prices of both gold and silver has been relatively historic as up until Thursday, the metals had seen 14-17 straight days of declines.  And the reasons for this have been a combination of fewer buyers, negative sentiment, and massive short covering.

Bullion banks used this demise in sentiment as the means to smash down the price using tens of thousands of naked short contracts, and relied upon the predicted reactions of commercial buyers to close out their long positions when margins grew too high.  And once prices fell below not only the recent achievement of their 200 day moving average but also their 100 day MA, these banks began covering their shorts en masse leading to what appears to be a bottom for the metals at around $1215 for gold, and $16.25 for silver.

kwn-sentimentrader-iii-5122017

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