by Alasdair MacLeod
Gold and silver suffered small losses on the week in subdued trading. In European trade this morning gold was at $1707, down $22 from last Friday’s close, and silver at $17.68, down 18 cents.
Gold has been trading sideways since spot first hit $1750 in mid-April. The hiatus that led to $50+ premiums to spot on Comex has diminished but is not over. The feeling is one of tension, best shown in our second chart, of open interest and the gold price.
[…] When open interest rose to just under 800,000 contracts in mid-January, we were becoming aware of the seriousness of COVID-19 and the likely consequences. Swap dealers (bullion bank trading desks) were record short at that time, facing enormous losses on their positions. The bullishness of the speculators was reflected in the gap that had opened up from last September between open interest and the gold price, shown in the chart.