27 March 2014

NAV Premiums of Certain Precious Metal Trusts and Funds - Stand and Deliver, or Roll Over

The metals are getting pressed heavily as we come out of options expiration,

The open interest, or number of April gold contracts that are going into First Delivery notice next week for the April active delivery month, are still rather high and are being pressured, especially those stalwarts who held in the money calls yesterday.

The open interest for April alone as of yesterday was 69,714 contracts representing 6,971,400 ounces.  The 'deliverable ounces' on the Comex were about 637,591 ounces of gold as of yesterday. 

So obviously not all the open interest can stand for delivery, and it never does, unless the price goes higher and encourages more eligible ounces to warranted over for delivery. 

I suspect a little of today's April price decline is due to the jackals taking a piece out of those who are rolling their contracts over to the next active month of June.  Notice that the preliminary volume for the April contract is well over two times yesterday's open interest.  Those are some hot little potatoes.

As usual, it appears that JPM has its hand on the jukebox, or the organ grinder crank if you prefer.