Fed Starts To Doubt Soft Landing Fantasy While Devil Shows Up in Gold Open Interest Figures

Gold contracts fell by 6,666 yesterday. The end of the world is nigh, or something like that.

Summary

• Gold open interest plunges further by 6,666 contracts approaches 5-year low, signaling a potential major bottom in price.

• The "soft landing" narrative of the Federal Reserve is starting to crack, with doubts emerging.

• Reverse repos break below $500 billion, drain slowing down, but continuing.

Gold Open Interest Plunges Again, Approaching 5Y Low

Gold open interest is down to 412,506, down 6,666, in a sign of the apocalypse or something, or the devil, or whatever all the sixes are. The 5Y low is 400K. Since 2008, an approach towards 400K in open interest has signaled a major bottom in price. In 2008 it was quick, and so, too, in 2018. From 2013 to 2016 though, it took a long time for a new rally to start, but price wise the bottom was very close even though the process took 3 years to pan out.