While much of the precious metals commentariat is borderline demented, including some of the articles at Kitco itself, Jim Wyckoff struck us as a straight shooter many years ago. Also on blogroll at right.
February 2:
Downside price action in gold, silver, after Monday's frenzy
Gold and silver futures prices are trading sharply lower in early U.S. trading Tuesday, with silver leading the way. It appears the attempted short-squeeze in the silver market has failed, at least at this point. Rallying global equity markets early this week are a bearish element for the safe-haven metals. April gold futures were last down $19.70 at $1,844.00 and March Comex silver was last down $1.718 at $27.72 an ounce.
Silver’s big pullback from Monday’s eight-year high of $30.35 in March silver futures suggests retail trader efforts to produce a short squeeze have failed—at least for the moment. The big jump in silver futures caught the attention of the Commodity Futures Trading Commission (CFTC), with acting Chairman Rostin Behnam saying the futures regulator is “closely monitoring” the activity. “The Commission is communicating with fellow regulators, the exchanges, and stakeholders to address any potential threats to the integrity of the derivatives markets for silver and remains vigilant in surveilling these markets for fraud and manipulation,” he stated. The Comex did raise trading margins on silver futures this week.
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins and have made strong recoveries after the recent declines. Traders and investors are more upbeat this week on news that the Covid-19 pandemic, while still gripping many countries, is showing some signs of peaking in the U.S. and Europe as vaccines continue to be distributed to populations, but not without some serious bottlenecks. Also, marketplace attention is on a new pandemic relief package that is likely to pass the U.S. Congress in the coming weeks. It also appears the GameStop and “Redditor” trade saga has died down, at least for now, as the marketplace again focuses on corporate earnings reports and upcoming economic data that includes Friday’s U.S. employment situation report.
In other overnight news, the Euro zone economy contracted 0.7% in the fourth quarter and shrunk 5.1%, year on year. Those numbers were just a bit better than expected, however....
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