The PRICE of GOLD jumped within $2 of December's all-time spot-market spike on Tuesday, setting fresh benchmark records in Shanghai and London for the 2nd day running as bullish trading in Comex gold futures and options contracts continued to contrast with shrinking investment in gold ETFs, coins, small bars and vaulted bullion.

 

Fixing today in China – gold's No.1 consumer market – at a new record above ¥496 per gram, gold then hit $2141 per Troy ounce in London trade before edging back but fixing around $2139 at the city's 3pm benchmarking auction, more than 1.9% above yesterday's then-all-time gold high.

 

Pointing at the US-based CME derivatives exchange's futures and options contracts, "[Gold] came out of the traps blazing on the CMX opening yesterday," says a quick trading note on gold's new record highs from bullion-market analyst Rhona O'Connell at brokerage StoneX, "following the rally on Friday driven by disappointing numbers.  

 

"Move became self-fulfilling with stops triggered and then of course that brings in the momentum boys."

 

 

With the giant gold-backed GLD ETF trust fund shrinking in size yesterday, down to its smallest since July 2019 as more shareholders sold than bought yet again, trading volume in Comex options contracts rose for the 4th session running on Monday to reach the heaviest turnover since gold prices briefly spiked to $2143 on Fed rate-cut hopes 3 months ago.

 

Trading volumes in Comex gold futures in contrast – a less leveraged derivative with lower volatility, profits or losses than options contracts – edged back yesterday from Friday's leap to the most since 4 December's price spike. And while gold futures volume then totalled over 70% more than its prior 3-year average on Monday, yesterday's trading volume in Comex gold options came in 180% above its 3-year average.

 

"Physical market slowing," says O'Connell, "and Shanghai premium has been steadily contracting after a very good New Year Holiday and in the face of higher international prices."

 

 

The gap between Shanghai and London gold prices today slipped to $27 per Troy ounce, three times the typical level of the past decade but the smallest incentive for new bullion shipments – out of the precious metal's global trading hub into its No.1 consumer market – since early December, and down almost $5 from Monday's level.

 

Shanghai premiums on silver also fell back, down to the smallest since early January but still running well above 10% at $2.70 per Troy ounce.

 

Silver then touched a 10-week high Tuesday above $24.20 after fixing at noon in London barely 5 cents below $24 per Troy ounce – its strongest benchmark price the first trading day of 2024 – before also dropping back.

 

This time last week, says the latest data from US regulator the CFTC, speculative betting on a rising gold price via Comex futures and options was 14.0% smaller than its 3-year average, net of that same 'Managed Money' category's bearish bets.

 

Speculative betting silver, in contrast, was net bearish, selling short the equivalent of 644 tonnes compared with the net bullish position of 2,395 tonnes shown on average across the last 3 years.

 

So-called cryptocurrency Bitcoin also set a new all-time high Tuesday, while US tech stocks fell further from last week's new records.