by Alasdair Macleod, Gold Money:
Well, it’s a bit of an exaggeration, but for the first three days of this week daily turnover in the gold future fell to about 80,000 contracts, compared with a more normal level of 120,000. At the same time volatility fell to as close to zero as you can get. The week started with the gold price at $1241 and until yesterday at 1.00pm UK time stuck to a tight range of $7 centred on $1244. Open interest picked up a little, as shown in our first chart.
This zombified market sat up in its coffin yesterday when the ECB announced negative interest rates on bank deposits. For Eurozone banks it is now almost cheaper for them to deposit gold with us at GoldMoney than to leave money on deposit at the ECB. Not surprisingly this stirred gold from its earlier torpor, and by 0830 this morning London time it had risen by a paltry $11 to $1255.
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