COT Report Predicts Silver Going Down

| June 13, 2019

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Every precious metal trader has been enthralled by the recent run-up in both silver and gold.  It’s brought back talk of a “silver surge”, especially with regard to the ratio of silver to gold, which remains very close to the highest ever. This has moved some analysts to call for investors to abandon gold in favor of silver.

But as we all know there are sometimes differences between people who write about the market and people who trade it. The latest Commitment of Traders (COT) report indicates traders are less bearish than before, but still bearish.  Traders increased silver futures positions by 13,966, but the net balance still remains bearish at -8,443 contracts.  So not all traders are buying into this rally as having legs – at least not yet.

Chartists should be concerned, whether technical or fundamental.  Once again silver bounced off overhead resistance and is currently falling back down. Not really a surprise, it’s done this before.



So your friendly Gold Enthusiast will continue with his position that silver is still not quite where it needs to be to break out. However, with the current trading range confirmed again, there’s a nice setup to either short silver for a run back down to support, then reverse the trade for another leg up on the roller coaster.


The Gold Enthusiast

DISCLAIMER: The author is long the silver sector via small positions in PAAS and SVBL, with no intentions of trading these in the next 48 hours.

Note: This article originally appeared at The Gold Enthusiast on June 11, 2019.


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Category: Silver

About the Author ()

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals. Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach. Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"