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<\/p>\nThe front month contracts of gold and silver are up from last week 1.21% and 1.79%, respectively. Gold continues to trade in a pennant type pattern.\u00a0 It is currently near the point of the pennant and would therefore expect a more pronounced move in the next few days.\u00a0 The ratio of the 1-month Gold contract to the 1-month Silver contract (Figure 1) fell -0.58% compared to last week, still moving sideways since early August.\u00a0\u00a0 With the front month gold and silver contracts closing yesterday at $1956.30 and $27.35, respectively, the gold\/silver ratio is now 71.54, 9.42% higher than the corresponding 15-year average.\u00a0 \u00a0December gold (Figure 2) closed yesterday at $1966.20, up 1.18% from the close on September 8.\u00a0 December silver (Figure 3) closed at $27.46, up 1.75% since last week, also trading in a pennant pattern.<\/p>\n
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From an open interest perspective, gold\u2019s total open interest is increasing slowly, ~3% since last week, but on low volume.\u00a0\u00a0 The latest CFTC data for gold for non-commercial net position of funds show funds are net long, near upper historical levels and rose slightly this last week.\u00a0 This rise was driven by an increase of non-commercial long positions while non-commercial short positions again remained unchanged.\u00a0 Silver total open interest rose this week, for the first time since August 10, but on low volume.\u00a0 The latest CFTC data show the silver non-commercial net positions of funds are flat with non-commercial\u2019s equally reducing long and short positions.\u00a0 As mentioned last week, the net non-commercial position of funds and total open interest continue to trend in opposite directions since mid-August.\u00a0 \u00a0The increase in total open interest this last week may be an indicator that non-commercial\u2019s or commercial\u2019s are again adding to their positions.<\/p>\n
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Now for Palladium.\u00a0 Last week we said that rhodium was rising to levels seen early in the year.\u00a0\u00a0 As high rhodium prices can result in increased palladium demand, we mentioned the price of palladium may rise.\u00a0 Palladium closed at $2414.50 yesterday up 4.71% from the close last week Tuesday breaking above $2365 at the close on July 27.\u00a0 Total open interest jumped 4% last week, rising along with increasing price, possibly indicating an increase in long positions.\u00a0\u00a0 But this rise was on low volume.\u00a0 \u00a0The latest CFTC report shows net non-commercial fund positions increased 2% since the previous report.\u00a0\u00a0 The palladium\/silver ratio climbed slightly this week with the increase in palladium.\u00a0\u00a0 As a note, rhodium climbed an additional 8% this last week which may continue to pressure palladium higher as well.<\/p>\n
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