As the chart below shows, silver is up around 6% since 1 September, while gold is down around 3%...

But as GoldMoney.com's Alasdair Macleod details below, Silver is extremely oversold in illiquid conditions, illustrated by our next chart.

The level of open interest is probably the best indicator of market sentiment.

At under 132,000 contracts it is as oversold as it was in early May 2020, just before the price rocketed higher from under $15, doubling in only three months. 

Being a far larger and more liquid market, the position in gold is less obviously oversold, as our next chart suggests.

Nevertheless, we can see that open interest refuses to fall below the 450,000-contract level, which suggests that a rally from here is a high probability, potentially taking out all-time highs.

This price resilience is in the face of severe weakness in the yen, euro, pound, and yuan. It is reflected in the dollar's trade weighted index, which continues to power ahead.

Undoubtedly, there are very good reasons to get out of the other currencies and into dollars. But the dollar's overbought condition must be extreme, exposing it to sudden and sharp bear squeezes.

Together with the deeply oversold position for gold and silver, undoubtedly mirrored in a raft of commodities and energy contracts, we can see how traders might become very badly wrong-footed.

There are other developments worthy of attention - this time in Russia. Following the referenda in Ukraine, Russia's border marches westwards, and in the absence of a ceasefire, the Ukrainians supported by NATO will be attacking Russia directly. It would be an escalation into a direct conflict between Russia and NATO.

Putin probably expects an uneasy ceasefire to follow.