The capitulation in gold and silver extended overnight with what we think is mostly stop-loss selling from the massive net long built up from the $425 gold rally off the February low and the $7.50 rally in July silver.

However, ongoing liquidation of flight to quality longs from lower ME angst is certainly adding to the washout while typical outside market influences of the dollar and treasury yields have not been a noted influence and are unlikely to be a key impact today.

In retrospect, there was apparently more flight to quality longs in off the potential for a widespread Middle East war than expected and that should be remembered if conflict returns...[MORE]

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