A year ago, speculators accumulated net long contracts on gold that exceeded anything seen since at least 2008. Starting in late 2015, silver speculators set several such records with the latest set just three months ago. Now, speculators in gold and silver are in full retreat. Net longs seem headed for zero for both precious metals. Current net longs in gold have not been this low since January, 2016. Current net longs in silver have not been this low since August, 2015.
Gold speculators have rapidly drawn down net long contracts since the last peak just last month (June, 2017).
Silver speculators have retreated off April’s post-2008 record in two stages.
Source: Oanda’s CFTC Commitments of Traders
In parallel to these retreats, SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV) last peaked in early June. Both GLD and SLV completed sharp relief rallies after selling off going into and after May’s meeting of the U.S. Federal Reserve. Whereas the March rate hike seemingly sparked a rush for GLD and SLV, June’s rate hike occurred in the middle of a fresh sell-off. It is almost as if traders in precious metals are finally taking the Fed’s tightening cycle seriously. I say “almost” because GLD has yet to crack the low that immediately preceded the March rate hike. SLV has overall behaved as expected with the now hapless ETF locked into a volatile sell-off since making a 2-year high last summer. A recent 15-month low confirmed SLV’s bearish status.
SPDR Gold Shares likely printed a double-top between April and June. A big technical test is on the way with March’s low holding as support while all three major daily moving averages point downward (20, 50, and 200).
The iShares Silver Trust has suffered mightily since last year’s 2-year high. SLV’s 50 and 200DMAs have alternated as overhead resistance and affirmation of downward pressure.
Source: FreeStockCharts.com
