Gold News

Gold Spikes, Silver Hits $32.50 on China and Comex Trading Amid Fresh Iran Tensions

GOLD PRICES jumped and silver surged to new all-time and 12-year highs respectively overnight Monday, apparently squeezing speculative bears in Comex futures and options, before both precious metals erased that China-session spike in London trade as global stock markets rose despite fresh geopolitical tensions and uncertainty in the Middle East, writes Atsuko Whitehouse at BullionVault.
Spot gold prices for London settlement rose as much as 1.4% to $2449 per ounce as speculative betting spiked yet again on the Shanghai Futures Exchange, extending Friday's move to a fresh all-time gold high of $2402 per Troy ounce set at Friday's 3pm London benchmarking auction.
Silver prices meantime jumped 9.5% from Friday's London benchmarking, hitting $32.51 per Troy ounce before also giving back all of today's earlier $1 jump.
"The rising risk," said Nicky Shiels, head of metals strategy at Swiss refining and finance group MKS Pamp, in a note late Sunday, "is that the Asia open for precious metals could get become even more squeeze'y even after Friday's price action" thanks to the crash of a helicopter carrying Iranian President Ebrahim Raisi. 
Despite silver prices rising last week to a 3.5-year high by Tuesday – the day when US regulators the CFTC collect futures-and-options market positioning data – speculative traders held a bearish position only 7.1% smaller than the long-term average.
Comex gold contracts actually saw bearish bets grow to a 5-week high, even as the bullion price hit a 4-week high on the reporting Tuesday, albeit growing to only 65.4% of the long-term average.
Chart of Managed Money's gross long and gross short betting on Comex gold futures and options. Source: BullionVault
Overall, the net bullish position of hedge funds and other 'Managed Money' traders in Comex gold derivatives rose 6.0% on last week's data, but it remained one third below the recent peak of February 2020, when the first-wave of Covid crisis began and the gold price surged to $1650, then the highest in 7 years.
The silver market's net speculative long betting meanwhile grew 19.1% to the most in over 2 years on the latest CFTC data.
Trading in Shanghai gold and silver futures contracts both leapt this morning alongside Yuan and all other currency prices for the 2 precious metals.
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Iran's state media confirmed on Monday that Raisi and Tehran's foreign minister, Hossein Amirabdollahian, were both killed in the helicopter crash.
US-EU sanctions against Iran over its nuclear program and military support for terrorist groups in the Middle East make the United States " one of the main culprits of [the] tragedy" according to former foreign minister Javad Zarif, because of the resulting shortage of aircraft parts. 
Industrial metals also enjoyed further steep rallies after the Communist government of China – the world's 2nd largest economy and the No.1 metals consumer nation – announced major steps to stabilize its property sector, raising ¥1 trillion ($138 billion) in extra funding and easing mortgage rules while inviting local governments to buy "some" unsold apartments.
Copper futures on the London Metal Exchange jumped more than 4% in early Monday trading, surpassing $11,000 per tonne for the first time in what analysts says is anticipation of deepening supply shortages. 
This followed last week's steep rally in the US copper contracts offered by the CME trading exchange group, when its cash copper price hit a record high of $11,414 per tonnes on Wednesday, pushing the premium over the LME's copper contract to more than $1,000 per tonne.
Gold prices in Chinese Yuan on Monday jumped 2.4% to all-time high at ¥578 per gram, but its premium to London quotes fell to $24 per Troy ounce from last week's average of $30.
That still offers 3 times the historical average incentive to new bullion imports.
The UK gold price in Pounds per ounce and the Euro price today both spiked 0.9% higher but failed to top their latest all-time records of 5 weeks ago, peaking Monday at £1918 and €2241 respectively before paring the entire gains.
The price of platinum – which find two-thirds of its demand from industrial uses led by auto-catalysts – surged over 1% early Monday to reach a new 1-year high of $1097 per ounce Monday morning, before subsequently falling to $1058. 
Platinum Week in London saw the white metal rise almost 9% in price, while the managed money's net long position in Nymex platinum derivatives more than tripled on the CFTC data to reach nearly a 1-year high as prices broke out above $1000 amid industry forecasts for a second consecutive year of deep platinum supply deficits versus demand.

Atsuko Whitehouse is the Head of the Japanese Market at BullionVault and the Editor of Japanese GoldNews.

See all articles by Atsuko Whitehouse here.

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