Gold turns south in early trading
Frisby thinks silver might be on the cusp of a multi-week rally

(USAGOLD – 9/15/2022) – Gold turned south in early trading as investors continued to process the implications of this week’s surprise inflation data. It is down $11 at $1689. Silver is down 21¢ at $19.48. Even with the downside of the past two days taken into account, silver has gained almost 10.5% since the start of September, and MoneyWeek’s Dominic Frisby thinks it could be on the cusp of a multi-week rally.

“There are three groups of traders [on the COMEX]: the commercials, the large speculators and the small speculators,” he explains in an analysis posted yesterday. “The commercials tend to be seen as the smart money, and, as they are often acting on behalf of miners, they tend to be sellers and so they tend to be short. Every Friday evening, the positions of the various traders the previous Tuesday – the open interest, as it is known – is announced. On Friday we discovered something extraordinary. That the commercials are net long – ie buyers – for only the third time in 40 years. That suggests a genuine shortage of metal. Meanwhile the speculators, who for the most part do not have metal to deliver, are net short. This opens up the possibility for a short squeeze.”

Silver average annual prices
($/troy ounce, 1971-2022)
bar chart showing the average annual price of silver 1971-2022
Data source: MacroTrends.net

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