Gold & Silver Price Short Term Outlook – 18th March 2013

Here is our weekly review of the positions of the large traders in gold and silver based on the weekly Commitment of Traders Report. It is the core of the short term price setting. Read our Crash Course In Short Term Gold & Silver Price Forecasting to gain insights in the basics, and the previous updates at the bottom of this article. The source of the information in this article: Standard Bank Research reports via Kitco.

Gold Outlook

The net speculative length (long minus short by speculators) is still at very bullish levels. Although it could take some time, and possible a bit of downward pressure is possible, the setup looks like it allows to rally potentially every moment.

gold_speculative_length_total_open_interest_18_march_2013

Silver Outlook

Although the net speculative length (as a percentage of open interest) was significantly more bearish in silver only a couple of weeks, the picture – from a speculative point of view – became as bullish as in gold. Mind how comparable readings on the chart below all resulted in strong rallies.

silver_speculative_length_total_open_interest_18_march_2013

5-year average

The point that deserves our attention, as we mentioned in the past couple of weeks, is the total open interest. Mainly in silver, and to a lesser extent in gold, the open interest is on a high reading compared to the 5-year average. As a rule of thumb, a price rally is supported by rising open interest. As open interest is already rather high, it could impact the “ferocity” of a potential rally.

total_open_interest_18_march_2013

Follow the gold and silver price evolution week on week. Read the previous updates.

Gold & Silver Price Short Term Outlook  (March 11th)
Gold & Silver Traders Positions on March 5th – Weekly Update
  (March 4th)
This One Chart Shows Gold Is Bullish  (February 25th)
What’s Next For Gold & Silver – Some Signals  (February 23d)
Gold – Here Is The Good News  (February 21st)

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