Gold OI hits nearly 600,000 contracts after an unprecedented 15 day surge. August OI stands at a record 329% of registered with 8 days to first notice.
July 19, 2024 12:40 PM
+++++++++++++++ Gold
Gold open interest continues surging now at 598,000 contracts. That is the second highest OI at this point in the cycle bested only by December 20221 and April 2022:
The 598,000 contracts is high by historical standards, however the surge over the last 15 trading days is unprecedented. Since June 27 open interest has increased by 156,000 contracts. That is the largest 15 day move in at least 4 years and likely the largest 15 day increase ever.
The other interesting story is the upcoming August gold contract. August is one of only 4 active month contracts. Over the last 4 days the net number of contracts that have rolled has been far below average. Currently the open interest at 8 days to first notice is 256,000 or 30,000 contracts over the 4 year mean:
Yesterday I looked at the chart above and thought that a price beat down could soon occur as price reductions often induce contracts to close. We’re 8 days to first notice and open interest stands at 329% of registered gold which is the highest in at least 4 years:
On several occasions in the past sharp price reductions occurred during the last 5 days to first notice which could be an effort to wash out positions standing for delivery. Looking at today’s $50/oz price drop … it appears the price drop may have arrived a couple of days early. Furthermore, it’s Friday and we can’t have traders go home for the weekend with gold being the only shining portion of their portfolio. And God help us if a major media journalist pointed that out!
We’ll soon see how resilient longs are … how many of that oversized OI stands for delivery.
++++++++++++++ Silver
The upcoming August contract is an inactive month. OI is 1,400 contracts about 21% over the mean:
PSLV, Sprott’s physical trust, has added 2.4 million oz over the last 40 trading days. If you followed my thread from a couple of years ago you may recall that a huge surge in PSLV’s silver purchases during the pinnacle of the silver squeeze correlated with a drawdown in comex vaults.
A new surge in buying at PSLV could impact comex vaults, but it’s going to take more than a few million oz.
Great stuff as always. August is the last active delivery month before both the US election and the BRICS likely rollout of the Unit currency, so those who make events happen in this world could be positioning themselves accordingly.
Well, I was correct about the silver Hammer. Half right about gold continuing on, as its not all about price climbing but rather demand. I also posited that something seems rotten in the State of Denmark. A larger financial event in progress? Maybe MegaBank Mayhem? I found it interesting that The Dime avoided his earnings call. Guess he didnt want to answer too many questions.