Gold and silver stormed through minor overhead supply this week, to mount an attack on the June highs at $1296 and $17.70 respectively. From last Friday’s close, gold rose from $1259 to $1285 in early European dealing this morning, having hit a peak in Asian markets last night of $1289. This was within $6 of breaking above the June high. Silver has some way to go, with the price this morning at $17.05, still 65 cents below its June high.
Silver is repeating gold’s action in its run-up to the August Comex contract expiry, when unusually the closing of short positions, evidenced by the fall in open interest, drove the price higher. Regular readers of this weekly report will know that at contract expiry, the price usually falls, as hedge fund managers are nearly always net long, and vulnerable to having their stops taken out by the bullion banks. In silver’s case, the active contract is September, so the same situation to that of gold last month, applies. The effect is illustrated in our next chart, of silver’s open interest and the price.
This post was published at GoldMoney on August 11, 2017.