Gold Holds Despite Silver Slam- Why?

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by VBL
Friday, Aug 13, 2021 - 7:56
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Aug 13, 2021
Good Morning. The DX is slightly softer. Bonds are stronger. Stocks are up small. Gold is up $10 impressively after withstanding a selling onslaught again in the face of weaker Silver yesterday. Silver is up 25 cents. Grains are up on average one percent. Crypto is stronger across the board but showing signs of being overbought at the moment. Only Oil is sideways to slightly softer
Gold Yesterday: Gold held its own yesterday. There was selling in almost everything around it. Silver was down almost 2% at one point but Gold barely budged. The explanation for the behavior can be seen as stagflation type action. This implies Silver is susceptible to an economic slowdown. That may be indeed happening but we believe the market is adjusting to Basel 3 rules. The LBMA is slated to close its non physical positions by year end. And while both metals are subject to the ruling, it is Gold that is a central bank asset. The relationship of the 2 metals in spread form certainly has started trending that way. We wrote about this extensively in the past. The most recent explanation is from July 10th  GoldFix Weekly: Banks Get Bullion Bypass Friday Night
Chart below depicts ratio of Silver to Gold. When the spread goes up, Silver is dropping in price relative to Gold.
Silver is finally back where it was relative to Gold before the February "Squeeze"
Now we see what's real and what is not
Commodities: Gold continues to recover from the flash crash at the start of the week. Monday’s high was $1765, and Gold is testing that area as of this writing Oil is off a little more than 1% since the middle of the week but remains net higher by 1% on the week. This after a drop of almost 8% last week. China’s efforts to curb its steel output have seen iron ore prices tumble. Today’s 2% loss brings the weekly drop to 6.8% and the four-week plunge to 26%.  Copper prices are holding on to about a 0.5% gain this week after falling 3% last week.
On Deck: This morning’s weekly initial jobless claims number is expected to show a small improvement to 375,000. The U.S. July PPI accompanies claims data at 8:30 a.m. The latest WASDE report from the Department of Agriculture is at 12:00 p.m. Turkey, Mexico and Peru all have central bank rate decisions today. OPEC publishes its monthly oil market report. Walt Disney Co., Airbnb Inc., and DoorDash Inc. are among the companies announcing results.- Bloomberg
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Gold Technicals

The following are excerpts from Moor Analytics Technical Reports posted here with permission and not actionable out of full report context.
Upside: Get long above $1,759.6. If we break above here and back below, look for pressure to come in.
Downside: Get short below $1,742.6. If we break below here and back above, look for short covering to come in.
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