Market Report: Option Expiration

by Alasdair MacLeod
Gold Money

Gold and silver drifted lower on the week, with gold down $20 from last Friday’s close at $1725 in London morning trade, and silver down $1.20 at $25.03 on the same timescale. Yesterday saw the expiration of April options for both metals, and the bullion establishment appeared particularly keen to ensure that silver options with strike prices at $25 expired worthless. Accordingly, the silver price traded down to $24.45 yesterday, and by the close it had rallied to just above $25.

Next Monday will see the last day of trading for the April contract, and as of last night there were still 103,696 contracts yet to close, roll forward to June, or stand for delivery. It will be interesting to see the outcome, because information from global trading centres suggests that the only way to gain physical gold in reasonable quantities is by exercising the delivery option on Comex.

By default, the US dollar’s trade weighted index has rallied this week on euro weakness. This is our next chart.

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