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Cowboys and Indians



Hi Mates,

A few observations briefly...

Silver exploded and acted like there could be a supply issue looming.The outstanding long positions, if required to be delivered into, are more than the Comex warehouse has eligible, let alone registered. The shorts may have to enter the physical market to affect delivery. We will know more in the next few weeks on this issue. Keep an eye on the comex inventory.

Daily chart has a strong channel of about 6.65-6.35... it appears the pressure will be to the top side but this is a wild old market and quite frankly, nothing would surprise. One year forward silver is in backwardation(ie the forward rate is LOWER than spot. The 1 year lease rate is about 1.40%).

Indian Central Bank selling Rupee to stem currency appreciation.This is not so good for gold as buyers want cheapest possible gold/rupee rate, but judging from imports that have increased by some three times volume of a few weeks back, India is getting comfy with Gold at $400 plus. Gold could struggle again at this very strong resistance around $413 and next stop would be up closer to $420. $407 looks like support again, with MAJOR support at 401-399 (which would need a stronger dollar to trouble the scorers).

Sorry so brief, will be back on deck soonest.


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position is gold, silver

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