Craig Hemke, proprietor of TFMetalsReport.com, stated that he's never seen a higher gross short position on the COMEX by the bullion banks. In his own words, "I’ve never seen a higher Cartel gross short number. Ever. Not in 2010. Not in 2011. No in 2013. Last Tuesday. At $17.05. For the week, The Criminals added 18,595 new naked shorts. That’s:
- about 93,000,000 ounces or 2900 mts
- 11% of total global mine supply
- 52% of total Comex vault"
I mention this because given the historic volume of shorts thrown at the market, silver has held strong. It's really amazing that 11% of the annual global mine supply can be sold short in a matter of days and there's not much technical damage to speak of. Whether or not the shorting is legal or not is an entirely different question that I won't get into here.
While the short term picture for gold remains bullish, it looks like there's more downside risk than silver. With yesterday's smash, gold lost its 50 dma on fairly large volume. There's a lot of congestion in the $1170-$1180 area so I would expect a decent amount of support here. The MACD has crossed to the downside but since this is a daily measure, it can oscillate quite a bit day-to-day.
I'll be unable to post for the next couple weeks so check back again in mid-June for new updates.