I know I've been harping a lot about this, but the chart just keeps marching unbelievably upward.
Over the last two days, open interest jumped another 12%.
In fact, there's hasn't been a substantial decrease in Japanese Ag open interest in the last six months. Compare this to NYMEX, where open interest has been mostly flat since September. And actually fell 5% over the last two trading days.
Most interestingly, the Japanese silver buying is apparently not a precious metals-wide thing. TOCOM open interest in gold has actually been falling steadily for months. Now at one of its lowest levels this year.
One possible explanation is increased trading in Japan from foreign players. TOCOM has been extending its night trading sessions and opening access for traders abroad in order to garner more international business.
This allows nimble traders to play both precious metals and the yen-dollar market at once by buying metal in Tokyo. Perhaps these investors are using this market to arb the gold/silver ratio?
By. Dave Forest of Notela Resources