Reasons To Optimistic About The Precious Metals Sector

The September 7th COT report is probably the most bullish I’ve seen since the beginning of my involvement in the precious metals sector in 2001. As most of you probably know by now, the “commercial” trader category is now net long both gold and silver for the first time going back to at least 1994. The banks (“swap dealers”) net long position in both paper metals increased. Conversely the hedge fund net short increased in both.

It may take a few weeks for gold to push through $1215-1220, as the hedge fund algos will be looking to attack the price until they have covered their enormous net short position. That said, it will take only one particularly surprisingly bad economic report or unexpected geopolitical event (Syria, trade war, domestic political surprise, reckless Trump tweet, etc) to trigger a spike-up in the price of gold. Once this occurs, the hedge fund computers will race to cover their shorts, which will drive the price higher very quickly.

Trevor Hall and I co-produce the Mining Stock Daily, a brief, daily overview of news and events connected to the precious metals and mining stock market. We focus on junior mining stocks. We are looking to exploit audio information distribution on 10 different digital platforms including Anchor, Alexa, Apple Podcasts, etc. Trevor and I discussed why there is cause for optimism in the precious metals sector for MSD’s Friday feature interview segment (click on graphic to listen):

One thought on “Reasons To Optimistic About The Precious Metals Sector

  1. I’m doing some engineering consulting work out at a large gold mine in Ontario. The company is for sale right now for a crazy low price, the stock has been hit hard over the last couple months. There have been a lot of buyers walking through. My engineering company has a bunch of new projects on gold mines in Ontario, some brownfield on existing mines, some new projects.

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