by Alasdair Macleod, Gold Money:
This week gold and silver fell sharply. The principal reason was the expiry of the June gold future contract on Comex, whose open interest has unwound 120,000 contracts in the last six trading sessions. Some of this has been rolled forward, but Open Interest still took a bad knock as shown in the chart below.
As of this morning there are only 5,454 June contracts left to sell or roll, so this selling pressure is effectively over. In silver, which has not been pressured by an active contract expiry, open interest has been increasing steadily, as shown in the next chart.
Silver’s OI appears to be driven by an increase in short positions in the Managed Money category, so hedge funds are presumably anticipating the July contract running off the board. Anyway their shorts are now at a new record high, which is technically bullish.
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