by Alasdair MacLeod
Gold Money
Gold and silver rose on the week, with gold up $21 from last Friday’s close at $1721 in morning European trade today and silver up 70 cents over the same timescale at $15.48. For gold and silver, the week started on a subdued note after the previous week’s fall, before picking up strongly yesterday (Thursday). Silver was sharply higher, open interest having fallen to a very low 132,725 contracts. Preliminary figures for yesterday show an increase of 4,357 contracts, which for silver is a bullish increase. The position is shown in our next chart.
[…] The contraction of open interest recently has been unprecedented, and the accompanying fall in the silver price tells us that weak holders have been eliminated. The pickup in open interest yesterday and the strong rally in the price are a signal for a decent rally. Importantly, the swap dealers (bullion bank trading desks) have closed their shorts, shown in the next chart.