by Alasdair MacLeod
This was the week that markets finally took notice of the coronavirus. Bonds soared and equities crashed in a flight to perceived safety. Base metals began to slide as the reality of global factory closures took hold. Oil prices slumped.
After an initial spike on Monday to $1689, gold fell a net $15 to $1627 on the week in early European trade this morning. Silver, presumably reflecting the weakness of base metals fell $1.30 to $17.21 over the same time frame.
These are gut reactions rather than the product of rational thought. In the case of silver, Comex’s open interest hit a new high this week, so the bullion banks will have been keen to trigger stop losses, with the March contract expiring this week. Tying it in with base metals in the last few days was a stroke of luck for them.
In heavy volume the Comex gold contract saw open interest remain steady as shown in our second chart below.