At the moment it seems to be quiet on the precious metal front. Last Friday there was hardly any movement in precious metals. Mine stocks were also surprisingly quiet. Today the same picture. But the gold price is working its way up step by step. From a chart perspective, the situation is exciting. Since gold moves in a bullish flag, the upper resistance line falls and gold is working more and more towards a breakout.
Many are waiting for an even clearer setback with gold. The reasons are not to be dismissed. The commercials have recently reduced their net short position to just under 290,000 contracts, mainly by reducing shorts. Nevertheless, this is still a high figure in absolute terms. But the past few weeks have already shown that we obviously see a shift in the positioning of market participants. Therefore, the COT data should be taken with caution. In addition, they are no good timing indicators anyway.
Chart-wise, little has changed since the last article. Both gold and silver are running in a bullish flag formation, which can hardly be seen as anything else than a correction movement of the previous rally. The question is, of course, how deep can this correction go? And here everything remains the same. Gold can still go back into the 1,370 dollar range, the breakout level. But currently, in our opinion, there are no signs that such a setback will actually manifest itself. On the contrary, the relative outperformance that silver is currently showing is encouraging us that gold and silver are already working on a new upward movement. Silver is even breaking out of this bullish flag formation, which – should this scenario manifest itself at the end of the day – would give the bullish picture another boost. We are still on the sidelines of the AKTIONARY commodities check, but currently think the long side is the more exciting one.