A Dangerous, Volatile Time For Gold And Silver Now, Watch Out!

We are in the nosebleed section for open interest in gold. Something is brewing deep in the plumbing, methinks. Be careful here.

• Gold open interest has exceeded 600,000 only 5 times, leading to local highs in price with different outcomes each time, but volatile every time.

• Current spike in open interest with low volume suggests something significant is brewing, potentially signaling increased price volatility ahead.

• Each time we hit these levels in gold derivative interest, something big happened in the banking system not long afterwards.

• This won’t affect physical stacking that much, just be careful with ETFs and trading here.

Gold Open Interest in the Nosebleed Section

Watch out. Gold should have a sizeable correction here, which appears to have already started. Open interest has broken above 600,000, which is a very rare event. There is a lot going on in the chart below and I wanted to spend some time explaining.