Gold and Silver Reach Three Week Highs as Shorts Run for Cover

Gold hit a multi week high on Tuesday, trading over $1216 an ounce as global investors increasingly look to buy precious metals as a means of risk aversion and a flight to quality. Equities remain under pressure in the first days of the new year and crude oil has plummeted to under $50 a barrel amid concerns of price deflation and political risk. While most financial markets have suffered as a result of this, the precious metals complex has successfully and predictably bucked that trend, as a move towards value investing and a belief in real money rule the day.

gold and silver coins
Short covering played its part as well in the gold move upward, with Comex gold futures increasing by nearly 2,000 long positions and short positions decreasing by almost 3,500 contracts in a very bullish sign of strength by the yellow metal. This remarkable shift in the long to short ratio of current gold futures contracts manifested itself in a price move for gold of almost $50 an ounce, from $1170 to a high that approached $1220 yesterday.

Silver made its run as well, climbing to $16.64 an ounce in a solid gain of a full dollar in just the last few days. Silver managed to reach its own three week high, and the latest technical movement appears to be confirming that a market bottom has indeed been established. The next technical breakout level for silver remains at $16.75, with an intermediate target of $17 an ounce and a longer term level of resistance at $17.36. Investors who have been wise enough to buy gold and silver coins and bullion have certainly been rewarded in the first days of 2015, and all signs point upward as we make our way forward in the new year.

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2016-10-31T12:19:55-04:00By |Categories: Gold News, Silver News|

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President and CEO of National Coin Broker
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