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https://www.linkedin.com/feed/…vity:7334612395199234049/
#COMEX Hashtag#gold futures open interest just fell to the lowest level in 7 years, despite gold trading near all-time highs.
- Normally, open interest surges when price surges
-> Why not this time?
Possible explanations:
1. Traditional sellers / hedgers (miners) are making so much profit at these prices they don't need to sell future production in the futures market (prices are higher than cash due to contango) to make a decent margin
2. Traditional buyers of gold (investors, hedge funds) are wary of further upside potential given price level
3. COMEX is losing its position as main trading venue for gold as physical demand is located in Asia
4. Fears of repeat of 1932 gold confiscation by US
5. Market participants fear COMEX could invoke 'force majeure' due to unforeseen circumstances (tariffs etc) and cash-settle open positions, possibly on the eve of a major gold revaluation, leaving them exposed to risk
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