After last Friday’s spike to test the water at $1300, gold has consolidated its six-week run since Monday in a narrow range of $1280 to $1290. In early European trade this morning (Friday) gold was trading at $1286.50. Silver’s week has also been one of consolidation, a few cents either side of $17, trading this morning at $16.98.
Paper gold on Comex is overbought, but not seriously so. The danger is if gold does move above the $1300 level, it will become very overbought and vulnerable to another unpleasant sell-off. There is some evidence in the open interest numbers that the swaps are closing their longs, rather than opening new shorts to accommodate the speculators. However, OI is now at the highest level since this bull-run commenced. This is illustrated in the next chart.
This post was published at GoldMoney on August 25, 2017.
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