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Are gold and silver finally coming back?

XAUUSD News by Allie Longford on 23:23 Octuber 17, 2018 EST

It is proving a difficult decade for precious metals but this may be coming to an end.

Gold and silver have experienced a post-parabollic decline ever since 2011. The metals have kind of experienced quite the opposite to what the stock market has been enjoying all these years. No matter all uncertainties we have lived in this decade stocks have been steadily climbing while these two have been in a merciless decline. There could actually be an inverted correlation between stocks and metals.

But as stocks are starting to stutter gold and silver are beginning to shine and this is despite the current cycle of monetary tightening that should act in their detriment.

The above chart shows that over the past 30 days gold and silver have been the "currencies" most sought after. In some cases they have risen over 6% in one single month like for instance against the Aussie and the loonie, which is interesting as these two tend to be positively correlated with the behavior of precious metals.

Gold found notorious long term support two weeks ago in the weekly chart and bounced from there which is another hint that a better fate might be round the corner.

On the bad news front is that retail traders are still heavily long both gold and silver with ratios above 66/33 depending on the broker.

For the time being we still need to see further gains to convince us that a bottom is in place and recovery underway.