COMEX Open Interest Decline And Market Trends

COMEX Open Interest Decline And Market Trends: Where Did Everyone Go?

In a strange turn of events, open interest in COMEX futures and options has repeatedly plunged to levels not seen in over a decade. Other U.S. markets continue to grow in volume and liquidity, but not COMEX gold and silver.
Let's start with these questions: Why and why now?
Why start there? Because I don't have the answers. Other U.S. markets are flush with liquidity and surging in trading volume. But COMEX interest is dwindling. To wit:
• As of Friday, April 24, total open interest for COMEX gold stood at just 365,451 contracts. This is over 50% down from the all-time highs of early 2020 and just 11,000 contracts above 20-year lows seen on April 2.
• Also on April 24, total open interest for COMEX silver stood at 110,384 contracts. This, too, is over 50% down from the 2020 all-time highs and the lowest daily level since March 30, 2012.

Gold And Silver Futures Market Analysisgo

Open interest in options has fallen off a cliff, too. As I type, it's option expiration day for the May contracts and the front month May26 silver has negligible interest. There are a few contracts clustered around the current $75 price level, but that's about it.

And total silver contract open interest is about to fall even further this week as we approach First Notice Day for the front month May26. As of last Friday, there were still 26,748 May26 contracts open with just three trading days remaining before "deliveries" begin. As per usual, there will be 3,000-5,000 contracts remaining open and "standing for delivery" after the contract goes off the board at Wednesday's COMEX close. What will happen to the other 20,000 or so that are still open as I type? Most of these speculative trading positions will be closed and rolled to the Jul26, Sep26, or Dec26. However, some will just be sold and closed. This will further reduce total open interest, and it may bottom on Wednesday near 105,000 contracts or less. If it does, we'll be approaching the lowest contract open interest levels since the MF Global debacle of late 2011.

Impact Of Margin Rates On Precious Metals Trading

Are open interest and trading volume related to margin rates? Maybe, at least tangentially. Total contract open interest for COMEX gold and silver peaked at 555,000 for COMEX gold and 162,000 for COMEX silver back in January, prior to a series of sharp margin hikes by the CME. Despite continued volatility, the CME announced a margin cut last week. Is this a desperate attempt to draw back traders who have simply decided to play in other leveraged markets, instead?

Why Precious Metals Trading Interest Is Falling

Either way, the timing of all this is rather curious. With prices remaining near all-time highs, you'd think that interest in trading futures and options on COMEX would be near all-time highs, too. Instead, the use of futures contracts for price exposure to the precious metals is dwindling.
Why and why now? I'll keep searching for answers, and we'll be sure to continue monitoring the situation as the volatile year of 2026 rolls on.

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