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May 25, 2019 | Silver Speculators Say It’s Time To Start Buying

John is author or co-author of five books, including of The Money Bubble, The Collapse of the Dollar and How to Profit From It, Clean Money: Picking Winners in the Green-Tech Boom and How to Profit from the Coming Real Estate Bust. A former Wall Street analyst and featured columnist with TheStreet.com, he currently writes for CFA Magazine.

The gold futures market took a big step towards bullish — or at least neutral — in the past week. Speculators (usually wrong at big turning points) scaled back their long bets while commercials (usually right at turning points) reduced their net short positions.

Gold COT silver speculators

This is progress, but still leaves speculators long and commercials short. The message: wait a few more weeks for 2019’s best entry point.

But silver’s story is a lot more interesting. In that market, speculators are now aggressively net short:

Silver COT silver speculators

Here’s the same data in graphical form, with silver speculator positions represented by the gray columns.

Silver COT chart silver speculators

Note that in September 2018, the last time speculators were comparably net short (visually, with the gray bars below the above graph’s center divide), silver was putting in a bottom that preceded a nice run through February of 2019.

Silver price silver speculators

This divergence between gold (wait and see) and silver (start buying now) is confirmed by the gold/silver ratio, which is at a multi-year high, implying that silver is undervalued relative to gold. Past spikes in this ratio have preceded precious metals bull markets in which silver outperformed gold.

gold/silver ratio silver speculators

 

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May 25th, 2019

Posted In: Dollar Collapse.com

One Comment

  • Avatar Donald Swenson says:

    I would agree that silver must eventually explode upward in price. The timing could be after the next major stock market crash. Price suppression may continue until the masses recognize that our fake money system is collapsing.Then the masses may run for physical.

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