Silver prices continued falling overnight following the big sell-off on Friday. The intra-day low of $17.325 in the active December futures contract represents a level last seen in the spring of 2010 when the market held either side of $17.25. Recent data released by the CFTC shows a dramatic increase in speculative short positions in silver, which raises the possibility of a “major league” short covering rally, but if the shorts are correct another percentage drop like we have recently seen in silver prices would indicate silver is headed for the low to mid $15.00s.
This morning finds base metals are also under pressure which frequently impacts the direction of silver. With speculative selling in gold not nearly as heavy as it is in silver, the increase in physical demand has been able to support prices and keep us above $1,200.00. On the technical side gold should find support at $1,185.00 while resistance can be expected at $1,225.00. Platinum and palladium continue to see long positions being liquidated while physical buyers who have been on the sidelines have begun to reenter the market.
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