This past week was a major catalyst for the precious metals, as they close the week up strongly based on strong fundamentals for the sector. We have been anticipating the next catalyst for the PM sector to start making a strong advance, and we got it.
Ever since the beginning of gold’s bull market, the economic balance has come under intense scrutiny. Demand has been on the rise as more investors have embraced gold as a store of wealth. And the supply chain has done its best to meet growing demand.
CFTC reports continue to show that net long positions in gold are being liquidated. Nineteen tonnes were shed in the latest reporting period on Comex. Long-silver specs unloaded 210+ tonnes from their logbooks and added 110+ tonnes to short positions.
Gold prices fell towards the $1,645 level at the opening of the midweek session in New York as the US dollar climbed slightly on the trade-weighted index. The initial action was rather subdued but speculators were perhaps justifiably skittish.
Considering gold's outstanding fundamentals, it's no surprise that demand has stayed strong a decade into its bull. And with demand only expected to strengthen in the years to come, a lot of weight rests on the shoulders of gold's suppliers.
Due to their propensity to sell gold from their massive hoards, central banks have long sparked fear and suspicion among gold investors. The new gold agreement must be understood to grasp the changing landscape.