A Lesson in Open Interest

From SprottMoney

I’ve learned a few things while watching the COMEX precious metals every day for the past fifteen years. One lesson involves the timing and scale of new contract issuance during price rallies, and all of us just got reminder of this last week.

Let’s start with a matrix of sorts. What you see below isn’t universally true, but if you watch and record the daily price and open interest (OI) changes for COMEX gold and silver, you’ll soon see that it’s about 90% accurate.