From Dr. Richard M Smith, Founder, TradeStops:

The evidence continues to mount that gold and silver investors are in for a shakedown … and probably sooner rather than later.

Don’t get me wrong. I’m bullish on gold and silver. I’ve established my initial position. I am not, however, going to chase a runaway train. In fact, as an investor in precious metals myself, I’m looking forward to the coming shakedown.

The strongest indication that the current rally in gold and silver is due for a breather continues to come from the actions of the commercial players in the futures markets. I’ve shown the below chart before. The situation has only gotten more extreme as the rally has continued.

Commercial interests in the gold markets are selling into this rally like nobody’s business. Every time these market participants have reached a negative sentiment extreme (when the black CCoT line crosses…