Gold
“Upon touching sand may it turn to gold” Greek proverb
Overall Sentiment
- Dollar fresh low, falling US bond yield, on-going tensions off Korean peninsula dominated headlines
- US economy likely to struggle as growing headwinds from Harvey and then Irma – Fed likely to remain dovish
Speculative funds positioning
- Fresh buying among net speculative funds continue and showed no sign of letting up as yet but shorts are also rebuilding at this level
Bullish perspective
- Fresh ETF buying bodes well
Bearish perspective
- 2 consecutive months of gain likely to put price vulnerable to profit taking
- Gold has not had a severe corrective month in 2017
Conclusion
Sentiment in the yellow metal remains bullish but looks extended – potential consolidation into US FOMC meeting
XAU/USD
Silver
“Don’t gain the world and lose your soul, wisdom is better than silver or gold.” – Bob Marley
Overall Sentiment
- Follow through buying but look a tad overstretched
- Produced a vulnerable weekly candle
Speculative funds positioning
- Short-covering activity may soon run its course which suggest that the rally may soon end
- There was fresh buying over August 29 – September 5 which suggests decent interest even though the price level is high
Bullish perspective
- Technical count suggest that the pullback may give late buyers another opportunity to add in
Bearish perspective
- A period of consolidation could see the white metal retreating lower to test technical support levels
Conclusion
Silver is starting to look toppish and the bullish catalysts may soon diminish and give way to fresh selling pressure
XAG/USD
Market moving events this week
- Gold:Silver ratio has only started its trend reversal – we continue to prefer silver than gold
- Bearish bets on dollar index may start to unwind their holdings as we head to September FOMC meeting
- Hurricane Harvey and Irma likely to skew US economic projections lower – US debt ceiling averted for now
- Other global central banks may continue to explore ways to tighten their monetary policy
