Dear Friends,

Recall that big increase in the November Gold contract’s open interest on Thursday of last week in which 886 new contracts were put on in that particular month. Prior to Thursday there were only 83 contracts outstanding in the November. It appears that those contracts were instituted for the express purpose of taking delivery as this morning’s data from the Comex stated that 823 of them were indeed assigned. Now we need to watch to see whether or not they will be retendered. If not, it will be encouraging.

Over the last few days, JP Morgan Futures division has consistently been the largest issuer of the gold while Bank of Nova Scotia has consistently been the largest stopper. Bank of Nova Scotia generally is a large stopper anyway so that is not unusual in itself. The question we would have is with Morgan. Unfortunately, we have no way of knowing for whom Morgan is doing the selling as that information is confidential outside of the firm and the warehouses but we do know that BNS was the buyer.

Click chart to enlarge today’s 12 hour action in gold in PDF format as of 12:30 pm CDT with commentary from Trader Dan Norcini.