Adrian writes about the comercial signal failures of gold and silve past and ......

Given all the stress in physical supply combined with technical indicators and the combination of fiat, and socio-political risk, we could be on the verge of a huge move in the metals that may be beyond any expectations we have.

We have had two commercial signal failures in the bull market so far, in 2005 and 2007. In the charts below I have marked with a red line the point where gold posted a price that was higher than its previous interim high. As soon as the new high is made there is hesitation as many investors believe the Commercials always win…this is shown by the first blue circle. Then gold moves higher as new investors move in. There is a period of consolidation as the shorts battle the longs, which is the second blue circle. Then the shorts run for the exits and the price rockets higher. If you look at the present market we are in the second blue circle…the shorts are about to run for the exits.

Cheers,
Adrian