I reached out to George Gero, Managing Director of RBC Wealth Management, to get his comments on the open interest in gold and other commodities. George will be on the show next week so in the meantime here is what he had to say…
Gold not yet responding to future inflationary outlook, 13 ½ year dollar highs, stock sector highs, ten year jumping to 2.30 area from 1.80 area all means longs need patience. Gold futures open interest 488675, down from one week ago 534640, as funds were fleeing, liquidation ensuing. Copper 241233, up from 239320, silver 174278, down with gold from 184277 and options up to 1,304813 from 1,220379. All this brought year lows, as expectations of large stimulus which later can be inflationary brought higher rates and stronger dollar as affirmed as well by Janet Yellen. If you recall early 1980 era gold’s response to inflation and high interest rates could re-occur next year.