Midweek metals madness

After rising nearly 14% in just two months and the premiums on Comex futures normalising, you would have thought gold would have a correction. Instead, it threatens to rise even further…

Despite recent strength, gold’s chart still looks good. Speculator positions on Comex are far from extreme, suggesting that they have yet to get fully on board the trend. In the last three sessions, prices have been driven by overnight (Asian) demand. Broadly, where gold goes silver tends to follow.

The extraordinary thing is that western financial markets have missed out in this game entirely. Even momentum-playing speculators appear luke-warm about the trend, otherwise Comex’s open interest would be significantly greater whereas it has declined by some 76,000 contracts in the last 18 trading sessions.

So, what’s going on?