gold, page-272

Ok I assume this is not a trick question and this is my theory.

Current silver price is in a massive break out. Flip the weekly chart look left and you will see the breakout this week is on clear air. Previously on the left in this entire zone they were only red candles implying bears or short sellers were in control for many weeks. Now as price rally those profitable bear positions are getting their stops fired. Bear stops are buy stops as they have to buy to close out their position. We call this short squeeze. As the price rally new Bulls will also rush in together with the Bears closing their position and create a frenzy. Have a look at gold daily in jan 2016 I think when the leg down were all sell candles implying bears were short selling to the floor. The price range at the bottom then broke resistance. People like uncle panda the n suddenly realise price ain't heading any lower so they closed their short and the bull frenzy or breakout triggered. We are current at equilibrium point in gold as no one is in control hence the price is meandering for many weeks now.

Silver its correlated PM is out performing gold. This can only mean if you look at their ratio to be expanding. This will imply gold is being capped while silver is allowed to run. Sooner or later if you believe in reverting to the mean concept, silver will consolidate while gold will play catch as the ratio of the two contracts to the mean.

From my perspective I am more concern on the strength of the AUD. Unfortunately it is being dragged higher because USD selloff as the market now factoring interest hike to be much later. Compounding the AUD steength is the rapid rise in IOP and carry trade potentials. If you likewise believe that IOP will soon run out of puff when the newly created mines from Vale hits the market next half year together with their JV FMG ore blending, AUD could then head south again. As long as xauusd is outperforming AUD, that is all that matters to domestic gold producers earning in AUD.