Bill,
If one’s got any questions over why the Gold price is being so aggressively capped at current levels one only need review the Open Interest of April Calls and Puts on the Comex which are coming up for expiry a week tomorrow (Friday 26th),

The concentration and size of positions still open between the strike prices of $1,100 and $1,150 is enormous,

Calls

Looking at the Calls first (as set out in the chart below): There is a combined total across this range of 30,414 Call Options outstanding (circa 95 tonnes of gold equivalent),

Puts

With regard to the Puts: There is a combined total across this range of 21,871 Put options outstanding (circa 68 tonnes of gold equivalent),

Calls and Puts Combined

Combining the total number of Calls and Puts together, there are 52,285 contracts outstanding within this range, equivalent to some 163 tonnes!

The stakes are very high indeed and the concentration of options written within this tight $50 price band is extremely high,

The Shorts have clearly got tremendous incentive to try and bully the price of gold down below $1,100 in the next 7 trading days, With seemingly endless pockets at their disposal the odds alas favour their success, although any success will come at a significant cost as it will more than likely require the use of substantial ammunition to get the job done,

Should we see a fall in price below $1,100 over the next week, it should be taken with the pinch of salt it deserves, To get the job done will in all likelihood require continued aggressive selling which will only have to be unwound after the event, setting up the precious metals for a significant rally heading into April,

Of course standing on the other foot, there is the chance that should their efforts prove useless a significant squeeze materialises,

Gonna be an interesting week ahead,
Best,
Rich (Live from ‘The Scarborough Bullion Desk’)