Rising Bond Yields

August 04, 2023

by Alasdair MacLeod Gold Money

This week, gold and silver prices were undermined by rising bond yields, allowing bullion banks to mark prices lower and cover their short positions. In Europe this morning, gold traded at $1934, down $32 from last Friday’s close, and silver at $23.46 was down 83 cents on the week.

Volume in the gold contract on Comex was exceptionally low, as the screenshot from the CME website illustrates:

[…] And when we look at Open Interest, it confirms that participation in this contract can hardly be lower.

[…] The ability of the Swaps (bullion bank traders) to shake out the longs in the Managed Money and Other Reported categories is becoming strictly limited. The Commitment of Traders Report for 25 July shows the Managed Money category net long 95,287 contracts and the Other Reported 78,352. But since then, Open Interest has contracted by 40,690 contracts so net longs in these two categories are entering oversold territory.