Gold Silver Tips

Much of the current weakness in Gold Futures appears to be only technical in nature. Some traders are exiting positions on disappointment that gold has not able to break above $1,800, particularly after a chart reversal on Oct. 5 when the monthly U.S. jobs report was released. But for the Long term, nothing has changed drastically, except maybe a lack of conviction on failing to cross the $1800 level. Technically speaking, Gold and Silver are both near their short term bottom & could take an upswing. Gold has a reasonable support near the minor congestion area of $1720 – $1726.3 range whereas Silver has support in the $32.05 to 32.41 ranges. This range can provide near-term buying interest. On a remote possibility of longs liquidation occurring on the current Gold Prices softening, if Gold slips below $1720, then Gold Prices may lose the upside advantage & could be seen hurtling towards $1666. Silver, though seems more sustainable on the upside levels, could lose steam if closes below $32 & then could slump to $30.25 also. There is the minor risk of more weakness if support levels in Gold & Silver do not hold. Gold Holdings by exchange-traded products are higher so far in October. Gold ETP holdings continue to flourish with inflows of 10.1 (metric) tons over the past week, taking flows for the month to date to over 30 tons. Inflows for the year to date have now reached 224 tons, surpassing the full year last year (175 tons) but still below y/y flows for 2010 (361 tons). Gold buying of 1.33 million ounces so far in October by Gold ETFs is about 52% of the September inflows. A potential upside catalyst occurs later this week when leaders gather for a European Union summit.