The week ahead for gold and silver

Do not be surprised if the current consolidation continues into next week. But in my opinion, anyone but the shortest of short-term traders will be looking to add to positions.

The underlying story is one of Chinese demand, driven by China’s public recognising two things: get out of the dollar (which they can’t do because of exchange controls), and buy gold and silver as the only games in town.

In the short term the bullion banks in London and on Comex have a problem. They are short without much prospect of covering. Therefore,…