Current thoughts 8/23/16

From the Trading Desk

On Friday, silver closed at $19.305 basis the active September silver contract.  The open on Sunday gapped immediately lower though and saw over 5.5 million ounces trade in the opening minute.  Silver traded all the way down to $18.83 in that first minute of trading before settling into an uninspired range around $19 for the rest of the session.  Silver has traded lower for three consecutive days now and the next major area of support is the 100 day moving average at $18.05.  Even though silver has approached its 100 day moving average on four separate occasions in the last six months, it has not been below it since February of this year.  The active contract month for Comex silver is about to switch from September to December.  With plenty of length still left in the September contract, there may be additional room lower for silver in the near term.  Overall though, the market still appears healthy.  Silver ETFs continue to add to positions with the largest inflow in five weeks occurring last Wednesday.  Unlike with gold ETFs, silver ETFs have had much more steady investors that seem to be committed to the position for the long haul.

Gold and silver teased us a little this morning and then the rug was pulled from underneath them. In reality though it was a rug but simply a bounce in the dollar. We went long in the ETF Trading Service yesterday JDST, DUST and DSLV and I sent out an alert to stay the course and we are up  7.64% on JDST, 3.66% on DUST and 1% on DSLV.

We can follow the dollar higher possibly now which should continue to put pressure on the metals. We saw the Nikkei move down 100 points after Kuroda continues to cause volatility to the Japanese markets. We just need to see some policy that will weaken the Yen.

Europe has fallen silent since the Brexit and I expect some news out of Europe soon enough too. We are just waiting for the spark to ignite the next crisis.

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About Doug Eberhardt

Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534


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