Au/Ag’s Open Interest Has More “Tell” Than The Price!

Posted at 8:54 AM (CST) by & filed under General Editorial.

Great and Wonderful Thursday Morning Folks,

      Gold got hammered yesterday and last night, after the word “Peace” was used with the trade now at $1,554.60, down $5.80 and recovering from the low at $1,541.00 with the high to beat at $1,562.40. Silver took the bigger hit, because it’s Silver, with the trade at $18.025, down 14.2 cents with its starting recovery at $17.825 with the high to beat at $18.225. The US Dollar, which is still getting support from the federal reserve “repo printing act” is now trading at 97.100, up 10.4 points after reaching up to 97.200 with the low at 96.955. Of course all this was done before 5 am pst, the Comex open, the London close, and only after Gold spiked to new life of contract highs in the EuroCurrency.

      In Venezuela, Gold’s new and temporary buying price is now at 15,526.57 Bolivar showing a drop of 241.70 overnight with Silver now at 180.025 Bolivar, losing 3.895. In Argentina, the Peso now has Gold priced at 92,846.32 proving a 1,503.87 A-Peso reduction with Silver now trading at 1,076.14 giving the buyer a 24.41 A-Peso discount, in what I think may last for a very short period of time. In Turkey, where the Lira controls the trade, Gold is now priced at 9,138.76 showing the reductions at 259.94 T-Lira with Silver dropping 3.645 in T-Lira value with the price at 105.972.

      January Silver’s Delivery Requests are now at 32 fully paid for contracts waiting for receipts and with a Volume of 13 up on the board with a trading range of $17.760 (high/low/last) showing a 32.8 cent loss for the seller but a huge gain for the holder as our Resolute Buyer may still be in need. This proves the Delivery Count increased by 16 contracts during yesterday’s trades. 

      Silver’s Overall Open Interest is where the paper meets the physicals, in a free for all fashion (inside a criminal element arena of play as the DOJ observes) with the total count right now at 234,376 Overnighters proving only a 20-count drop in all paper that controls Silver. In short, yesterday and last night’s activity did very little in attempting to scare out buyers, in fact it seems they didn’t scare anybody, as the Resolute Longs remain. Gold’s Overall Open Interest has leveled off but at the extreme count of 787,584 Overnighters with the new Life of Contract Paper High of 797,110, which was established this past Monday. So, if the price fell but very few Resolutes left the field of play, does that mean a short-term drop?

      We think so and this is the reason why we suggest chartists, who ignore the paper behind the price, may be missing the reason how the market gets controlled. Strict chartist will never know the Open Interest has more “tell” than the price. 

      In the meantime, we wait, as nothing has changed. The repo markets continue to require newly printed cash in order for the centrals to stay in place, at the same time all this paper is being applied behind the price which has remained super-elevated. We’ll continue to support the Resolutes, and the buyers of physical, while the centrals continue to need more printed cash. Enjoy your day, keep the attitudes positive and a smile on your face no matter what, and as always …

Stay Strong!

J. Johnson