And Then There’s This…Tuesday, April 28th, 2009 Apr 28th, 2009 | By Ed Steer | Category: Gold Market
There was a brief flurry of excitement in Globex trading on Sunday evening’s New York open. Both gold and silver were up right out of the starting gate…silver especially so.
The U.S. bullion banks [the only ones allowed to trade at that time of day] were either going long or covering shorts. This rally continued through the Sydney open in gold…and into the beginning of trading in Hong Kong for silver. At those two points, a not-for-profit seller showed up…or the buying/short covering stopped. Those were the highs of the day in both metals. It’s quite unusual for the not-for-profit sellers/price cappers to hit the metals at two widely separated times like this. Almost without exception, they hit both metals at precisely the same time. I should quickly point out that trading volume in New York on Sunday night…and in Sydney and the Far East early Monday morning….was basically air in both metals. Probably no more than a few hundred contracts in silver and not a lot more than that in gold.
Anyway, the balance of Monday’s trading through the rest of the Far East, London and New York, was down. Both gold and silver closed Monday’s electronic trading session virtually on their lows of the day. There was light volume in both metals yesterday…even when you add in London and New York.
Before continuing further, I must admit to an error in my commentary virtually every day last week. Friday, as it turned out, was not options expiry in gold and silver…it was yesterday…Monday. I was reading the CFTC’s 2008 chart. I won’t make that mistake again. My apologies to you.
Open interest for Friday’s trading showed the following changes. In gold, o.i. rose 2,010 contracts to 346,636. And silver o.i went the other direction…down 1,467 contracts to 95,610. As I’ve been pointing out for the last week, it’s very difficult to read anything into these numbers because of the switching that traders are doing right now. Those that hold contracts for May [both in silver and gold] are switching them into future months [or closing them out] to avoid having to take delivery when first day notice arrives on Thursday. Today [Tuesday] is the last day that the April contract in gold and silver can be traded on the Comex. Tomorrow [Wednesday] is the last delivery day for the April contract. And, as I mentioned a couple of lines back, first day notice for delivery into the May contract is Thursday, April 30th…the last day of the month. If they haven’t switched their contracts by then…they have to stand for delivery…which requires them to come up with a lot of money.
While I’m discussing Comex deliveries, there were 460 gold contracts delivered on Monday. The big deliveries [issuers] were Bank of America (NYSE:BAC) [again!] with 311 contracts and Goldman Sachs (NYSE:GS) with 95 contracts delivered. The big stopper [receiver] was the Bank of Nova Scotia (NYSE:BNS) [321 contracts]…with a raft of smaller stoppers picking up the rest. So, with those 460 contracts delivered on Monday, there are 523 gold contracts left to deliver in the next two trading days…plus whatever contracts are purchased today…the last trading day in the April contract [which I mentioned in the previous paragraph].
