After yesterday’s selloff, gold seems to be trying to make a comeback today despite Crude oil is up approximately 2.5%, while the USD came off slightly late this morning.

A good friend of mine, a retired options trader, reminded me of the large open interest in GLD call options expiring September 18. There are approximately 43,000 GLD $410 strike calls and 144,000 $415 strike calls outstanding for September 18. The 43,000 $410 calls alone represent the equivalent of almost 400,000 ounces of gold if exercised. For the $410 strike to come into play, GLD would need to trade around $410, which at the current relationship between GLD and gold is approximately equivalent to $4,470 spot gold. Still a move from here, but with that much open interest sitting above the market, these strikes are worth watching as we get closer to expiration.

EFPs are relatively high with December Gold EFP yield ~ 4.49% vs ~ 4.11% OTC and December Silver EFP yield ~ 4.32% vs 3.6% OTC.

For informational purposes only. This is not investment advice.