It appears the same 'contagion' that is driving copper prices higher is also impacting gold and silver this morning. As we have noted previously, the CCFD unwind drives synthetic short (hedge) covering and inevitably rolls down the curve to drive spot strength (as the paper gold market tail wags the 'physical' market's dog). Gold is at 3 month highs and silver getting close.
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One wonders if the following disclosures from Bank of America early this morning had something to do with the move:
- Strongest weekly buying of Gold in more than two years
- Large specs increased their Gold and Silver longs at the strongest pace in two years
Charted:
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