Gold reached a high of $1,297.40 in overnight trading and prices are back down to where they closed Thursday ($1,288). Silver reach $18.65 and has fallen back to around $18.54.

Gold needs to break below $1,273, and silver needs to drop below $18.24 to promote a breakdown in price.


-SILVER COT REPORT- I wanted to point out the record number of net shorts (114,414 contracts) held by commercial traders. The chart below illustrates net short positions of the commercial traders at various inflection points. These figures don’t always time the exact tops or bottoms, but they are a good gauge of overall market health. The record number supports lower silver prices, at some point.


I will monitor the action after the open and update if necessary. I will be paying particular attention to GDXJ if prices significantly penetrate the trendline.