Ignore the Editor's inserted headline. He did not put that headline there about a short squeeze. A good article by Phil Streible article where he concludes at the end that it looks like Silver has now posted a dreaded double top. It is a good article where he identifies the 3 factors in the last week which caused the decline in PMs (where gold he says is still holding up), and where silver in particular got hit hard and had the second worst day so far this year. (it may have even been the worst). ...
so my take is that the FED has now stated, and this female board governor is considered Jay Powell's proxy and spokeswoman, their thinking considered to be identical, that it is gonna raise rates at least one more time. Lurking between now and year end is the dreaded Recession which would really hammer precious metals. Streible comments that in what he is suggesting is now gonna be a pullback, it is a good time "to build positions" in PMs. He has a limitless belief that the FED can manipulate the economy basically over time, and that it is in comfortable control of everything and if it wants to create a recession which is moderate in nature, that it can do so.
BOTTOM LINE IS HE SAYS LAST WEEK SHOWS THE FORMATION IN SILVER OF A DOUBLE TOP. THAT IS WHAT HE SAID TOWARDS THE END.
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Contributed Commentaries
Gold/Silver: It's time to position for another 'Silver Squeeze'
Phillip Streible
Friday May 12, 2023 12:54
Kitco Commentaries | Opinions, Ideas and Markets Talk
Commentaries & Views
Precious Metals edged lower this week, sparked by liquidation in the Copper market on Wednesday fueled by weaker Chinese new bank loan data. The data came in 50% lower than most analysts predicted, indicating that the recovery in China is much slower than planned. We also heard comments from the Fed stating that inflation remains stubbornly above their targets even though recently it has been coming down. Additionally, news that the administration has failed to reach a deal on the debt ceiling ahead of the deadline has investors nervous about a default. The "knee-jerk" reaction in Gold and Silver gives us an excellent opportunity to build positions for a year-end rally.
Daily Gold Chart
The technical backdrop in Gold is much stronger than Silver, with prices holding above the psychological $2000 level and critical support down at $1985. A break below $1974 will begin signaling a near-term failure, and our proprietary level shifting trend traders to the sidelines. At that point, we will want to use call options to maintain upside exposure. Ultimately, we must see Gold close above $2028.4 at a minimum to help negate this week's negative activity.
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Daily Silver Chart
Silver faces tremendous overhead damage and will only negate this week's selloff once a close above the 24.71-24.95 area. Thursday's selloff posted Silver's worst session since February 3rd, where strong employment data reaffirmed the Fed's hawkish stance. On a short-term basis, the technical backdrop shows a "double-top" on the chart. The eight-day exponential moving average (EMA) is set to cross the thirty-four-day (EMA)to the downside, which could result in additional pressure from active short-sellers. The near-term bearish forces will drive prices down to the 50% retracement giving us another excellent opportunity to add to core positions using the December 1000 oz Silver contract. Fundamentally, there is tightness in the physical markets, and mining supply is beginning to decline. We expect that over the next year, demand from solar, electric vehicles, and other technological advances will create the next "Silver-Squeeze," extending prices back to contract highs.
