Market Report: Traders Struggling to Close Shorts

by Alasdair MacLeod
Gold Money

Despite persistent premiums on Comex over London’s spot gold and silver, both metal contracts were marked down this week, with gold down $54 from last Friday to trade at $1673 in Europe this morning, and silver lost $0.34, trading at $14.86 on the same timescale.

Recent weeks have seen Comex swaps (bullion bank trading desks) struggle to close their short positions. In what appears to have been a coordinated takedown of open interest, the gold price rose. This is shown in our next chart.

[…] To have the gold price rising while open interest is falling indicates a bear squeeze in progress. This one is unprecedented. But since open interest bottomed on 8 April, it has begun to rise again. What appears to be happening is further attempts to close short positions are being resisted by determined buyers taking the opportunity to rebuild positions.

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