re: gold .... comment for 23/jan/2003 dlux
for every seller there is a buyer .. and for every short there is a long.
With commercials short and specs long and with the open interest keep on rising the commercials are more short and the specs more long.
If open interest declines substantially and the price of gold keeps on rising implies that the commercials are throwing in the towel and and covering their short positions, ie a short covering.
If open interest declines substantially and the price of gold drops implies that the longs and capitulating and are selling out of their long positions.
Open interest cannot indefenitly keep on rising and the market would force the longs or the shorts to cover their positions.
Dont forget that the last two days we have seen volumes on Commex over 100,000 contracts and this is significant as well.
Gold is primied for an assualt on the $400/oz level or a revisit down to the $320-330/oz level.
Open interest could indicate the direction of the price of gold in the days ahead.
