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
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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
