Gold and Silver Still Alive Per the CME Group

The Market Gage - Dillon Gage's Precious Metals Newsletter

The CME reported today that their average daily Gold future contract volumes averaged 525,000 in January, up from last year’s average daily volume of 405,000 contracts per day. That’s a 38 percent increase. Silver on the other hand rose 40 percent also showing a healthy increase.

Algorithm programs managed by hedge funds contributing to the increased trading volumes are indicated by the amount of switches executed in the Gold and Silver contracts. There are many different types of programs, from news driven to some that are just looking to take a dime on both sides of the market.

The price of gold breaking out of its most recent trading range this morning, surprisingly so, even with a stronger dollar on the board. The way I see it, if Gold can rally with the dollar index UP and over 100, that’s a good sign that higher prices are in the cards. But without any significant news I expect a one step back, two step forward price action. As I indicated in my first comment of the year, I expect gold to be higher by year end and still believe that will happen. The reasons are, I expect the Fed will be hard pressed to raise rates any time soon and with the madness in the political arena it could only help to increase the price over the near term. Plus one more important item: the Trump administration is still calling for a weaker dollar making our goods more attractive to the rest of the world.

Good inflows into the Gold and Silver ETFs on Friday. Gold increasing 332,764 ounces and silver up over one million ounces. These inflows still seem to be commodity fund related as the retail investors here in the states are still content holding on to their equity positions.

Physical demand for product in the Far East and in Europe still on the quiet side as reported by some traders.

Have a wonderful Monday.

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