Everyone looks at charts for clues of timing. But they are more helpful in identifying price trends after they have started than telling us when they are about to start. For that, we need to delve deeper into market actions.
The level of investor interest in precious metals has retreated to the point where it has almost ceased to exist. It has been like this for months, indicated by the level of open interest in silver on Comex, which is the black line illustrated below:
And no wonder: last May, open interest fell into deeply oversold territory, breaching levels last seen in September 2013. On Wednesday this week, there was a sudden increase in open interest of 4,589 contracts, which tells us that on the $3.50 markdown in the price, buyers emerged for 714 tonnes of paper silver.
Confirming the almost total absence of investor interest, the managed money category which is comprised of hedge funds and similarly regulated investment managers has long contract interest still at record lows for the last twenty years:
