Gold Silver Market Report 27 March 2017

Fundamentals and News

Despite The Rise In The Gold Price, Gold Speculators Did Something Very Strange Last Week

The gold price rose 3% during the last COT reporting period.

Despite that large rise in the gold price, speculative longs only added a little over 17,000 contracts which is lower than we would have expected.

Surprisingly, speculative shorts added to their short positions during this large rise in the gold price which is very unusual.

Despite the rise in the net speculative long position, the historical net speculative position in gold remains low.

Speculative US Dollar traders added to their own net long position in the USD to the highest levels since January, which is USD-bearish and gold-positive for contrarians.

The latest Commitment of Traders (COT) report showed a decent increase in speculative long positions, which was expected due to this report’s inclusion of last week’s change in gold post Fed meeting. But surprisingly enough, this report showed that speculative shorts increased their positions despite the 3% rise in gold during the COT week.

That is a bit unusual as we tend to see speculative positions mirror the gold price (rising gold means rising longs and falling shorts), and that is especially the case on big (2%+) moves in the weekly gold price. The only times we usually see the opposite is when the net speculative position is at extremes like back in July of 2016 when the net speculative position was hovering at record levels – but at current levels we are actually at fairly low speculative net long levels.

We will get more into some of these details but before that let us give investors a quick overview into the COT report for those who are not familiar with it.
(*source Bloomberg)

Data – Forthcoming Release

Technical Outlook and Commentary: Gold

Gold for Spot delivery was closed at $1243.57 an ounce; with loss of $1.64 or -0.13 percent at 2.00 a.m. Dubai time closing, from its previous close of $1245.20

Spot Gold technically seems having resistance levels at 1251.3 and 1257.5 respectively, while the supports are seen at $1231.2 and 1225 respectively.

Technical Outlook and Commentary: Silver

Silver for Spot delivery was closed at $17.76 an ounce; with gain of $0.18 or 0.23 percent at 2.00 a.m. Dubai time closing, from its previous close of $17.58

The Fibonacci levels on chart are showing resistance at $17.80 and $17.90 while the supports are seen at $17.45 and $ 17.35 respectively.

Resistance and Support Levels

Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai

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