by Alasdair MacLeod
It was another quiet week for the gold price, but silver lost out. In morning trading in Europe gold was $1579, up $7 since last Friday, while silver had lost 23 cents at $17.87. Silver’s underperformance relative to gold puts the gold/silver ratio at over 88 times, telling us that all the action is headline stuff, with little broader interest in monetary relationships. Silver can be expected to outperform gold when the wider investment community begins to understand that gold is in a bullish phase, and silver is a catch-up investment.
While the gold price was relatively steady, there was a remarkable fall in open interest as the February Comex contract expired. From its peak at 799,541 contracts on 15 January, by yesterday’s preliminary estimate open interest had fallen almost 116,000 contracts, nearly all of which occurred this week. This is shown in our next chart.