High volume on a particular
day or for a month will indicate extra speculative or hedging
activity. In 1996, for example, the average daily futures turnover on COMEX
was 35,278 contracts. However, in January of that year, as the gold
price pushed towards a six-year high of $414.80, 115,736 contracts were
recorded in a single day and the daily average for that month was a record 62,942
contracts.
Annual volumes, equally,
reflect periods of high or low interest in gold; in 1987 COMEX achieved 10.2
million contracts but in 1992 scarcely six million, while the flurry in January
1996 pushed the annual total back up to 8.9 million. Turnover was also
brisk in the 1997-1999 period as the market saw aggressive shorting of gold.
In each of these years 9 million or more futures contracts were traded annually
on the New York exchange. By contrast, in 2000 declining speculative interest
in gold resulted in COMEX volume slumping to just 6.6 million contracts.
Options volume on COMEX
is also an indicator of activity although the absence of any statistics for
the much larger over-the-counter
options business make it less complete.
Volume
The number of contracts traded
each day on futures exchanges such as COMEX
or TOCOM is an important indicator
of market mood.