Today has been another “all about Italy crisis day”. We have seen wild moves in FX pairs, first with major risk off sentiment, that was later reversed. What will happen in Italy we leave to the pundits. As of writing this we are reading breaking news:

“Dow Jones hits new all time high”

Let’s turn our attention to a hated space that has seen investors give up holding longs over past months. We are talking about the precious metals space.

Both gold and silver put in impressive candles today. Gold climbed above the 1200 resistance and is trading at 1205 as we write this post. It is trading above the 50 day average that was last seen back in April. Note the pop above the negative trend.

Silver is up 2.5% and trades well above the 50 day average.

We mentioned the GDX US a few days ago. The gold miners ETF  has gained on every occasion over the past 7 Fed rate hikes. GDX US is currently trading right above the 19 resistance. A close here or higher and this looks like shorts will be covering quickly.

It would be a brave trade, but yellow and black gold (oil) have gone totally the opposite way for a long time. The spread of USO US versus GLD US is trading far out on the normal distribution.  

Being short gold has been profitable since this spring, but it is surely not an original trade here. Net non commercial golds are at rather extreme levels (white). Short gold looks like a very crowded trade. Dare the opposite?

Source: charts by Bloomberg