Open interest in gold trading

Open interest is the total number of futures contracts that remain open at the end of a day. Every contract has a long and a short, so open interest counts positions, not trades. It rises when a new buyer and a new seller create a contract, falls when an existing long and short both close, and is unchanged when a position passes from one holder to another. COMEX publishes it daily for GC and for options.

How it applies to gold trading

Open interest tells a trader what kind of move is happening. Price rising with open interest rising means new longs are entering: fresh money, a trend with participation. Price rising with open interest falling means shorts are covering: a squeeze that may run out when they are done. Price falling with rising open interest is new shorting; falling with falling open interest is long liquidation. Large drops in open interest around the roll are mechanical and should be ignored.

Open interest also feeds the COT report, where it is split by participant type, and option open interest by strike shows where large positions sit ahead of expiry.

The COT tool on this site charts open interest alongside the managed-money net position, so the two can be read together over the past several years.

A common mistake

Reading open interest from a spot platform. Spot gold has no central record; only futures exchanges report it, so the figure must come from COMEX.

See also: COT report, GC futures, Roll, Managed money.

Frequently asked questions