Silver 1 OZ 999 NY (XAG=X) struggling to get excited
Large speculators upped their bullish positioning in gold futures sharply for the third straight reporting week for data compiled by the Commodity Futures Trading Commission, but the net long has risen so fast that some market watchers now wonder if gold prices might not be due for a correction lower.
During the week-long period to June 11 covered by the latest CFTC report, Comex August gold rose $2.50 to $1,331.20 an ounce, while July silver slipped 2.9 cents to $14.74.
Net long or short positioning in the CFTC data reflect the difference between the total number of bullish (long) and bearish (short) contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.
The disaggregated report shows that money managers further hiked their net long to 129,160 futures contracts from 96,182 contracts the week before, which in turn had been more than triple from 26,274. The bulk of the most recent increase was short covering, as reflected by a decline of 23,001 gross shorts. However, there was also fresh buying, with the number of total longs increasing by 9,977.
In silver, money managers continued to whittle down their net-short exposure. This now stands at 8,060 futures contracts, compared to 19,536 and 38,007 lots the prior two weeks.
The net short is declining, yet futures traders are still “struggling to get excited about the white metal despite trading at the lowest level [relative] to gold in 26 years,” Hansen said.
The bulk of the decline in the net short was due to fresh buying, with total longs rising by 8,560 contracts. There was also short covering, with gross shorts declining by 2,916.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 15.30.
The projected lower bound is: 14.57.
The projected closing price is: 14.94.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 19 black candles for a net of 10 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with PREC.M.XAG=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 51.7090. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.53. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 21 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 74. This is not a topping or bottoming area. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.106 at 14.941. Volume was 8,900% above average (trending) and Bollinger Bands were 1% narrower than normal.
Open High Low Close Volume___
14.820 14.949 14.790 14.941 9,137
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 14.83 14.78 14.92
Volatility: 17 16 17
Volume: 914 183 46
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 0.1% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 9 periods.