24 September 2015

Option Expiration Day For Precious Metals on the Comex

On Tuesday I wrote:

"We are going to have an option expiration on the Comex on this Thursday the 24th. I am not expecting it to be a big event, since October is a light contract, with the real attention and action being concentrated in December.

However, there are over one thousand puts at the 1125 strike, so the cynical me might call that good support.

If I were trying to skin the specs and holders of options with shallower pockets, I would take gold down to about 1120ish, suck in more puts and scare the calls out, and then take the price up and skin all those put holders at expiry."

Jesse, Cafe Americain June 22

And so we saw gold push lower, and then rally higher sharply afterwards, especially today.

Fait accompli.

This might be overlooked in the recent posts about the potential shortage of bullion that appears to be occurring, centered on the physical market in London.

Higher prices may provide a cure, but they need to be stable higher prices to free up bullion held in strong hands.

Don't think for a minute that this is a 'square' market now.   The Bucket Shop is in a virtual bullion lockdown and the paper trade is alive and well.

They can expand leverage freely given the craven silence of the regulators and professional courtesy amongst the looting class.

But they cannot create more physical bullion, and therein lies their limits.