Gold and silver recovered well this week, continuing a rally which is now two weeks old. Gold, priced in dollars, rose by another $13 to $1247.50 in early European trade this morning (Friday), up $31 from the lows of 7 July. Silver has now recovered $1.75 from the lows of the flash-crash two weeks ago, to $16.40 this morning.
Comex futures volume has been normal, but there’s something unusual happening, best exemplified by silver. We know that the bullion banks have shaken out the speculators (mostly hedge fund longs), and the flash-crash referred to above will have taken out the speculators’ stops, enabling the banks to close their short positions profitably. This (as of Tuesday, 11 July) left the managed money category (i.e. hedge funds) net short of 6,361 contracts, representing 31.8 million ounces. The extremeness of this position is shown in our next chart, only exceeded once, in mid-2015.
This post was published at GoldMoney on July 21, 2017.