These two factors are clearly in play today as the metals move higher in a surge we've been expecting since late last week. However, these gains might just as quickly be reversed so there are a few indicators you'd better be watching.
As mentioned in the title of this post, both physical demand and fear seem to be driving price today. How can we measure physical demand? Sometimes it shows up as a lack of overnight "London Monkey" trading. As prices were firming last week, we noticed this phenomena occurring again: https://www.tfmetalsreport.com/blog/7941/some-possible-encouragement And now look at the action overnight (earlier today) in London:
Don't ask me to quantify this because I can't. This is pure conjecture based upon learned experience. As I've followed this stuff daily for nearly seven years now, I've noticed a clear correlation between London demand and the London Monkey daily price smash. And this clearly correlates with price trend. So, when The London Monkeys stand down...as they have more than half the time the past two weeks...this tells me that demand for physical is strong on London and, consequently, you can expect price to rise in New York, too.
Also affecting things today is fear. This is the fear that Donald Trump is going to be the next president of The United States...I guess. Why this is such a "fear", I don't know. Perhaps, instead, a better word is "uncertainty". The gold price is anticipating the uncertainty that a Trump victory would bring. Either way, when you get a 14-point turnaround in a major national poll just one week before the election, the effect is rather startling. https://www.washingtonpost.com/news/the-fix/wp/2016/11/01/post-abc-track...
And it's not just the metals. We've been tracking the impending breakout and surge in Bitcoin, too, and it's up 3% today and back through 0. Since the previous breakouts on this weekly chart added 40% or so to the Bitcoin price, I'd say your next target is likely near 00.
Turning to the metals...Just yesterday, we discussed the likelihood of a surge higher. Prices had found support at/near the respective 200-day MAs and, with copper surging higher, we thought that a move like we're seeing today was coming.
And while this is all very nice, well and good, we really haven't accomplished anything significant until prices move back above the 50-day moving averages. Yes, silver never closed below its 200-day and gold is now more than 1% back above its own 200-day...BUT...if you want to reverse the recent downtrend and get the hot, momo-chasing Spec HFT algo money to come charging back into the synthetic paper gold derivative, then you need this move to extend up, to and through the 50-day.
For the sake of clarity, the charts below show nothing but the location of the 50-day MA for both the Dec16 gold and Dec16 silver. THESE ARE THE KEY LEVELS TO WATCH. A move through and close above these levels should excite the algos and drive price even higher. So, watch them both very closely and be sure to note the sharp down angle of both, too. This makes the pressure to jump to and through even greater.
Two other key indicators we're going to be sure to keep watching are copper and the HUI. Copper is up another 1% as I type. This is the 7th consecutive up day and I have a last of .222. The HUI is also higher but not as much as you might hope/expect. I've got it at 218 and up about 5.5 points. What should you be watching? Let's get copper to continue higher and move up and out of this pennant AND let's get the HUI back above 220. Both of these would help spur the metals even higher, too.
There's a lot more going on but I think I'll stop here so that we can get this posted for everyone. I'll try to add more info in the comments section.