Gold bears squaring the books
A bear squeeze in progress for gold is set to drive prices higher. A catch up could prove explosive for silver, which is being left behind
Gold and silver diverged this week, with gold rallying strongly following the previous week’s fall. Silver’s recovery was more hesitant. In Asian trading overnight, gold was $2666, up $104 from the previous Friday’s close, and silver $31.00, up 78 cents on the same timescale. Turnover in both futures contracts on Comex was good, but not spectacular.
The charts below show how Open Interest has evolved on both contracts.
The lower chart shows how the silver price has declined along with Open Interest (OI) since late-October. This is what one expects: as the price declines, the bulls sell down their longs, so OI declines.
Now look at the upper chart of gold.
