by Alasdair Macleod, GoldMoney:
Gold and silver prices steadied this week and appear to have found a base. This morning in European trading, gold was $2347, down $45 since last Friday’s close. Silver was $27.70, down a dollar on the same timescale.
From the spike highs on 12 April, even the bulls thought a correction was due, and opinion appears to be still side-lined. However, there are some indications that prices might have found support.
Comex Open Interest on the gold contract began increasing on falling prices after Monday’s large markdown. This indicates that there are marginal buyers of gold futures at these levels. More importantly, it tells us that the Swaps (mostly bullion bank traders) are no longer taking out hedge fund stops and closing down their shorts, but are finding themselves increasing their short positions to suppress prices. This is against a background of moderate Open Interest: