06 October 2014

Divergence In Gold and Silver Open Interest

Someone asked to see the open interest divergence in the gold and silver futures graphically that I mentioned in an earlier post here.

As always, Nick Laird of Sharelynx.com has the goods.

By itself the open interest divergence is not compelling, just odd.

But with everything else, especially the great and ongoing divergence in ETF and Fund physical inventories, and it begins to approach the irregular.
That is not to say we can comfortably call a bottom here, as oversold we might be at old support.  The downtrend will not be broken until we see a higher high.  
It would not be well to underestimate the thugs and pampered princes and the markets they that they control.  
What they cannot manage is the physical market which will eventually break them, as it did the London Gold Pool.  But that will take time.  But when the time comes, it will fall apart rather quickly unless some of these jokers wise up first and stop the spiral of inventory leverage and paper before it becomes a critical, systemic problem.