All That Expires is Not Gold
It is difficult to draw comparisons between last year's market for gold futures and today's, given that gold wasn't exactly on anyone's radar in late 2008, but we'll try anyhow. Curiously, the January contract (expiring January 5, 2010) might as well be chopped liver according to volume today. What does it say about futures traders that none want a contract that expires 4 days after the new year? Just that they plan on having a significant hangover? Or that they want zero roll risk after a long market holiday?
It is a bit odd because crude (expiring withing a day of gold) doesn't seem to show the same effect.
We saw the same "gold gap" effect in 2008...
...but why was is this effect confined to gold futures? (Well, actually silver and palladium, but not platinum, seem to share it). Is it NYMEX specific? Something to do with specifics of the metals contracts in January? Or does this suggest that the majority of gold futures traders are long chaos over the holiday season? Implied volatilities for futures options don't seem to suggest so. Or that, compared to investors in crude futures, most gold investors are American and thus impacted by the Thanksgiving holiday season more directly? We actually have no idea.
Damn gold bugs.
(2 votes)
on Wed, 11/25/2009 - 15:29
#142479
Something smart to say, to impress Marla.....Think...think......Darn.
on Wed, 11/25/2009 - 15:37
#142497
Nice try George. Tell her you think her shoes look great.
on Wed, 11/25/2009 - 15:44
#142514
Her shoes look great? I did not know that.
on Wed, 11/25/2009 - 15:54
#142534
That's because you weren't looking at her shoes, were you?
on Wed, 11/25/2009 - 16:47
#142642
Good one CD, I do not mind playing straight man for that.
on Wed, 11/25/2009 - 15:31
#142482
It's all to do with tungsten and naked shorting of GS et al. Once they find out they've been naked all along, 1650 will be the next stop.
on Wed, 11/25/2009 - 15:32
#142486
There are more fingers in the gold market than drops of Idumean blood in the central bank ownership. Gold is the most heavily manipulated market in the history of mankind and yet despite all his monumental attempts to bring her to ruin she still rises with the wind. Man will never learn he shall not win his war with nature.
on Wed, 11/25/2009 - 15:33
#142487
ah, actually, there are a good many of us willing to wait to see what happens with the gold delivery situation next week.
there's a good chance the Comex won't exist in January if they can't deliver.....pfffftttt
so who buys a contract thru an entity that's defunct? or can't deliver? dunno. not me.
on Wed, 11/25/2009 - 15:39
#142502
on Wed, 11/25/2009 - 16:10
#142573
mystery to me, too...
L. Edelson of Weiss (Edel-Weiss?) calling today for a USD collapse to 70 this very weekend to come, the theory being that last year the post-Turkey Day weekend saw the same downspout-and-spider thing going into the Monday following...
and with gold expiry next week, well...
But he likes to get out ahead of the curve sometimes...so who knows...I'm standing aside
Swenlin's DecisionPoint charts for USD on weekly monthly show interim t-line supp around 73.5, and then of course toward 70 after that...
If the USD-S&P inverse correlation holds tight, maybe getting into the 73's will be the thing that pulls stocks out of this angst-ridden S&P 1100 area, to 1120-1150, if only to get the move done, and then decline
anything to get us out of this will-they-or-won't-they business below 1120..
Goldman sez 1060 year-end though, and Kass estimates 1030, and if they are right then the Santa won't find its Santa hat this time
I dunno...just trading..
on Wed, 11/25/2009 - 15:43
#142511
Is the contract telling us the bank holiday schedule?
on Wed, 11/25/2009 - 16:28
#142606
on Wed, 11/25/2009 - 15:46
#142516
The Jan is just friggin bizarre...was it a display anomaly? IE, is it still there right now?
on Wed, 11/25/2009 - 16:28
#142608
on Wed, 11/25/2009 - 15:46
#142517
seasonality is so ingrained that it becomes self fulfilling every year, even if its all in the minds of the goldbugs and traders....
on Wed, 11/25/2009 - 15:49
#142522
i explain feb, as they got past december, and we know that, and ....march is the next potential horror show.
one thing about the gold market everyone should understand is that the insitutions have controlled this for so long that it takes time for them to grasp that they are now careening from disaster to disaster.
god help them if the peasants really start buying in numbers....when peasantry buys gold it tends to go out of the market, and stay out. also, hard to fob off tungsten as they buy in small size, rather than large bar you can thick coat with gold plate.
if the comex doesn't go now, it seems like it very well might in March. they have sold more than they can possibly deliver it appears. As wonderful as the vampire squid is, I don't think -- as there are now assayers at work on every bar -- they can conjure up the necessary "gold" to settle.
on Wed, 11/25/2009 - 15:51
#142529
Oh look: zero volume in March! Is it because Easter is coming? and zero in November must be for Thanksgiving.
Gold trades with G,J,M,Q and Z expiration.
The question is why is there a January listed?
on Wed, 11/25/2009 - 16:16
#142592
on Wed, 11/25/2009 - 15:51
#142530
ah, the US mint just suspended sales of gold and silver.
.....
i don't think this news is going to be "buried" as effectively as they hoped tonight.
on Wed, 11/25/2009 - 15:57
#142546
Also minimal volume for Jan. silver...
on Wed, 11/25/2009 - 16:01
#142556
"The United States Mint has suspended sales of gold and silver yet again. 2009 has seen an unprecedented demand for the 2009 Gold American Eagles and 2009 Silver American Eagles as investors have clamored to secure their assets and protect their wealth against the rising tide of inflation. "
Just landed in email inbox from APMEX. Certainly talking their book but can't be ignored.
on Wed, 11/25/2009 - 16:13
#142584
Sales suspended before due to
blank bottlenecks and expected to resume
in early Dec. Reuters describes Secret Service
protected $50 American Eagles as novel items since
1986...
http://www.reuters.com/articlePrint?articleId=USN2536556520091125
on Wed, 11/25/2009 - 16:03
#142559
Doesn't CLF0 expires on 21 december?
on Wed, 11/25/2009 - 16:04
#142563
Does anyone here actually trade???
Gold futures trade actively in every other month, but crude trades actively in every maturity.
If you traded futures, you would see that every month.
Disgraceful.
on Wed, 11/25/2009 - 16:17
#142594
ok, enlighten me...if gold trades actively every other month, and yet I have December and then both January and February contracts to work with (liffe) on my screen, then why would one trade so much less actively, as you state,
and how does that explain the apparent anomaly that Marla points out?
They both trade (Jan & Feb), so why would one trade so much less?
tia
on Wed, 11/25/2009 - 16:35
#142617
Um, one is closer to expiration?
on Wed, 11/25/2009 - 16:43
#142634
That makes all the sense in the world. Until you see that Bloomberg is reporting January volume. So... what is that exactly?
Also, I asked this question specifically:
So your attitude is a little misplaced there, Gordon.
on Wed, 11/25/2009 - 17:28
#142698
Marla - According to my records, the January 2009 contract was just recently opened. In my TWS-IB platform, I always keep at least 2 months up, front month, and the subsequent. When I rolled from Oct to Dec as front month, the next one that opened was Feb. 2009. I had not thought to go check on a freshly opened Jan contract until your post. Sure enough, it is there now, it wasn't just a short while ago.
Have a delicious Thanksgiving.
on Wed, 11/25/2009 - 16:07
#142571
Equities up but BANK rolls hard into the close. DX and GC printing interesting candles.
RED SKY IN MORNING, SAILORS WARNING.
on Wed, 11/25/2009 - 16:24
#142600
jruspini is right,
Gold is not actively traded in Jan EVER, nor is it liquid in March, May, July, Sep or NOV
its a DEC, FEB, APR, JUN, AUG, OCT, DEC - calendar.
Pick up the CME/NYMEX/COMEX rulebook for a change.
Crude trades monthly - since its extremely tied to physical flows from delivery and pricing perspective.
on Wed, 11/25/2009 - 16:49
#142648
on Wed, 11/25/2009 - 16:28
#142607
Just read the rulebook...
http://www.cmegroup.com/rulebook/NYMEX/1a/113.pdf
DELIVERY MONTHS
During each calendar month (the "current calendar month"), the Exchange will make available for trading contracts that provide for delivery of gold in the following months: 1) the current calendar month; 2) the first calendar month following the current calendar month; 3) the second calendar month following the current calendar month; 4) each February, April, August, and October falling within a 23-month period beginning with the current month; and 5) each June and December falling within a 60-month period beginning with the current month.
on Wed, 11/25/2009 - 16:35
#142616
It doesn't mean anything. It's just tradition. They open up the off months for the gold for the convenience of commercials and hedgers that need that much specificity, but there is no short term/local participation, so there is no reason for traders to trade there if the bid offer is tighter elsewhere.
on Wed, 11/25/2009 - 16:46
#142641
on Wed, 11/25/2009 - 16:58
#142662
fyi, jan gold expires on the 27th
on Wed, 11/25/2009 - 17:07
#142669
Frankly,that could be simple. the trade of year end could be long gold,short spx. So money managers set their computers and lock their gains. And then they can go on their vacation knowing that in case of any"black swan event,they are safe.
on Wed, 11/25/2009 - 17:12
#142680
Tax reasons?if you have a loss this year,you take it now,and since stocks are to high,they pile the revenue in the DEC contract. Any tax expert here?
on Wed, 11/25/2009 - 18:07
#142733
this was the seasonal high we are seeing. they will dump gold in late dec
on Wed, 11/25/2009 - 19:09
#142774
I concur nobody cares about Jan gold .
on Wed, 11/25/2009 - 21:29
#142848
Giant Vampire Squid's latest target... he he he.
on Thu, 11/26/2009 - 02:44
#142976
Marla,
First a difference between way contracts are dated on NYMEX vs COMEX: NYMEX Dec contracts actually expire in Nov, so the bulk of crude day-trading has moved to Jan contracts (most brokers can't take delivery of crude, so forbid you from trading near-month contracts close to expiration). COMEX doesn't work that way, so the Dec contract has the volume. Gold futures also seem to work in units of 3 months (like index futures), so next contract will be March
Thanks
on Thu, 11/26/2009 - 03:31
#142979
sounds like a CC event to me
on Thu, 11/26/2009 - 04:38
#142992
http://www.cnbc.com/id/34153788
nice to know ;)
on Thu, 11/26/2009 - 11:09
#143119
Gold futures have active months, while Jan is not one of them, moron.
on Thu, 11/26/2009 - 11:28
#143140
You guys should go over at jsmineset.com, where all this has been discussed in extraordinary detail in the past.
Gus
on Thu, 11/26/2009 - 11:44
#143161
This has always been the case with metals futures. How about doing some homework before stating that volume in a contract is somehow linked to a failure to deliver. If they couldn't deliver Jan then why would anyone trade the feb?
on Thu, 11/26/2009 - 12:15
#143193
Ya you should totally do your homework before starting a story that is basically asking why the market has this behavior and then this story wouldn't have existed because it's purpose would have been void. Comex noob. :P
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