by Alasdair MacLeod
Gold and silver enjoyed an exceptional day yesterday, breaking out of their recent trading ranges on solid buying, reflected in significant increases in Comex open interest for both metals. Preliminary figures indicated that gold’s open interest increased by 16,031 yesterday (Thursday) while the price rose $27.40, and silver jumped 43 cents on an increase in open interest of 3,209 contracts.
In European morning trade today, gold was trading at $1766, up a net $22 on the week, and silver at $25.94, up 70 cents.
Silver’s active contract is May, and from now on one would expect some price pressure being applied to stale bulls in that contract, forcing them to close or roll their position forward to July. Amazingly, open interest in this contract increased yesterday by 1,134 contracts to 85,922, which suggests that at the end of the month will feature contracts standing for delivery. Could this be evidence of a new silver squeeze? Certainly, at the retail level there is a movement developing out of unallocated accounts into either allocated or taking physical delivery, putting service providers under pressure.