01 June 2015

Gold Daily and Silver Weekly Charts - Active Month and Non-Farm Payroll Shenanigans

There is little risk of an actual default on the Comex in the precious metals. I just wanted to make this clear.  If any default does come, it will be from outside the system in.

Although I emphasize the 'deliverable' component of the warehouses in many of my discussions, it is good to remember that there is quite a bit of gold kicking around the warehouses that *could* be delivered easily enough to fulfill any unusual demand.

The missing ingredient is a 'higher price.' A higher price will shake that additional supply loose.

And we must recall that The Bucket Shop does not do much with the gold they do have, except play liar's poker with it, and mostly shove it around the playing table.

But the fact remains that Open Interest for this active month of June we have just entered is rather high, relative to the amount of gold that is readily deliverable at these prices.

So playing some games like squashing any rallies, or rallying the price up to knock it down, is not a bad play with shaking some of the weaker hands amongst the gold longs loose of their positions. 
Letting a rally gain some traction and break out at this point is a dangerous situation for those who are tasked with managing gold's paper price.

Non-Farm Payrolls on Friday.

Have a pleasant evening.