It's the weekly Gold Rush!

This week Strazza and I dig into the COT profile for Gold and Silver, revealing the sentiment behind the smart money.

Check it out...

From the Desk of Ian Culley @IanCulley

What will ignite a precious metal rally to new all-time highs?

We often discuss the dollar and real yields as critical catalysts for a sustained uptrend for gold and silver. It’s simple: These shiny rocks will struggle if the dollar and rates continue to rise. 

But there’s more.

I want to share another crucial piece of the puzzle – commercial positioning.

From the Desk of Ian Culley @IanCulley

What will ignite a precious metal rally to new all-time highs?

We often discuss the dollar and real yields as critical catalysts for a sustained uptrend for gold and silver. It’s simple: These shiny rocks will struggle if the dollar and rates continue to rise. 

But there’s more.

I want to share another crucial piece of the puzzle – commercial positioning.

We analyze the Commitment of Traders (COT) report generated by the Commodity Futures Trading Commission (CFTC), which updates the positions of the largest speculators and commercial hedgers weekly.

We publish a table with this data in our commodities post every Friday.

Our focus lies solely on the commercial hedgers for one reason – they represent the largest short sellers for any given market. By monitoring these players, we discern the attitudes of the strongest hands.

Think of the COT as a sentiment gauge.

Commercial hedgers reached extreme levels in gold last fall, coinciding with significant troughs in price in 2016 and 2018:

Strong hands move markets. And the strongest hands were...

It's the weekly Gold Rush!

This week Strazza and I highlight critical levels to keep on your radar in the coming days and weeks. 

Check it out...

From the Desk of Ian Culley @IanCulley

The dollar is back and on the move.

After falling for four straight months, the US dollar index $DXY is up three days in a row. Whether the near-term dollar strength turns into a more sustained trend is anyone’s guess.

Regardless, risk assets feel the pressure as many areas begin to correct, including precious metals. 

Despite this recent selling pressure, we have clear levels to trade against when it comes to Silver and mining stocks.

From the Desk of Ian Culley @IanCulley

The dollar is back and on the move.

After falling for four straight months, the US dollar index $DXY is up three days in a row. Whether the near-term dollar strength turns into a more sustained trend is anyone’s guess.

Regardless, risk assets feel the pressure as many areas begin to correct, including precious metals. 

Despite this recent selling pressure, we have clear levels to trade against when it comes to Silver and mining stocks.

Before we dive into those critical levels of interest, a friendly reminder…

An overwhelming amount of supply still exists for Gold futures in the 1,924-1,965 zone:

It’s not surprising to witness gold correct below this level, especially since it gained more than 20% off its Nov. low.

In fact, I would be more surprised if gold didn’t pause at this level. I’m not concerned with the selling pressure in Gold.

On the other hand, the next two charts highlight key levels precious metal bulls need to defend.

First up, Silver futures:

I noted a couple weeks ago the bull flag in Silver looked a bit long in the tooth. Fast...

It's the weekly Gold Rush!

While Gold futures digest overhead supply, strength broadens across the metals space.

Check it out...

From the Desk of Ian Culley @IanCulley

Plenty of gold bugs have Krugerrands buried in their backyard or basement –  if not secured in a safety deposit box at their local bank.

It’s no wonder gold falls under the “end-of-the-world” category of assets.

Regardless, gold prices can also rise with risk assets.

I raise this point not only as an important reminder but because it’s pivotal to understanding our bullish thesis for precious metals.

It’s a metals story….

When I say Gold 5k, it’s in the same breath as $8 Copper. The structural uptrends for these metals are inseparable in my view, as both stem from a new commodity supercycle.

The overlay chart of Copper and Gold futures tells the story:

Both metals carved out big bases and resolved higher back in the early 2000s. Those base breakouts led to Copper tripling in price as Gold rose almost 500% during the preceding cycle. 

I believe a similar base-building process is taking place now. An upside resolution for one likely coincides with a breakout from the other.

That’s why I find the current strength from Copper, Tin, and other metals...

From the Desk of Ian Culley @IanCulley

Gold is running into supply.

Whether the former 2011 highs still hold any psychological significance doesn’t matter.

Gold bulls continue to find an overwhelming amount of sellers at that level. This will remain the case until demand absorbs supply.

How long will that take? It’s anyone’s guess – maybe weeks, perhaps even months or quarters.

The point is, gold needs time.

Meanwhile, silver futures are coiling within a tight range…

Check out the daily chart of gold’s crazy cousin:

At first glance, the current consolidation appears to be a bull flag or pennant.

But, in their classic “Technical Analysis of Stock Trends,” Edwards and Magee issue a clear and present warning: “A pattern of this type that extends beyond three weeks should be watched with suspicion.”

Since the silver chart is working on the fifth week of contracting, the bull flag interpretation is losing credibility.

That doesn’t mean silver futures can’t rip higher here, of course. If they do, I’m buying strength above 24.80 with a tactical target of 27.50.

And if silver is trading above 25,...

From the Desk of Ian Culley @IanCulley

The NYSE might be closed today, but futures markets are open.

And while the volume remains low during US trading hours, it hasn’t stopped Gold futures from revisiting a critical level.

Gold currently challenges a price level engrained in goldbugs’ minds worldwide…

The prior commodity supercycle peak!

Check out the chart of Gold futures:

It’s back at the scene of the crime – the 2011 high at approximately 1,924. Those former highs mark the height of the prior commodity supercycle (as far as Gold’s concerned) and the ideal level to have exited long positions. Not many sold the top, of course, reinforcing its psychological significance. 

Twice bulls have managed to push price above that critical level. And twice, those rallies failed to produce sustained uptrends. 

This is a logical level for Gold to pause and digest its recent gains. Especially when we consider gold has risen more than 18% off its November lows. Nevertheless, gold mining stocks are catching a bid.

First, the PHLX Gold Index $XAU reclaimed a crucial shelf of former highs, hinting at a new...

From the Desk of Ian Culley @IanCulley

Have you noticed precious metals printing fresh highs?

Last week, gold posted new multi-month highs. So did silver and platinum, hitting their highest levels since the spring of 2022.

Not a bad start to 2023 for these shiny rocks. And it gets better!

Gold broke out to new all-time highs relative to bonds last week. The yellow metal is not only showing strength on an absolute basis – it’s also outperforming its alternatives.

These are classic bull market characteristics and two critical pieces of evidence suggesting gold is in the early stages of a new structural uptrend.

If gold is on its way to new all-time highs, gold mining stocks will be participating. 

And it just so happens they are…

If gold prices rise, companies that remove gold from the ground and sell it will surely benefit. Simple!

Check out the Philadelphia Gold and Silver Index $XAU, which tracks the 30 largest precious metal mining stocks:

We don’t directly trade XAU. Instead, we look to the index for information. Think of it as a roadmap for gold mining ETFs and stocks.

Last November, XAU...