US-Iran Deal Lowers Oil; Funds Rotate From Silver to Gold

A tentative US-Iran agreement weighed on crude oil prices and corresponded with increased commitments in gold futures and reduced speculative longs in silver, according to the Commitments of Traders report for the week ending June 9 and options data.

The COT report shows non-commercial gold longs increased by 1,888 contracts and commercial gold longs rose by 5,135 contracts, lifting total gold open interest by 6,657 contracts. For silver, non-commercial longs declined by 1,446 contracts. Total silver longs rose by 1,055 contracts, while silver open interest increased by 631 contracts for the week ending June 9.

Options activity on major exchange-traded funds tracked the futures flows. On the largest gold ETF, the put-call volume ratio moved from 0.73 to 0.78 between June 2 and June 9, while the put-call open-interest ratio edged from 0.56 to 0.58 over the same period. For the largest silver ETF, the put-call volume ratio changed from 0.44 to 0.40 and the open-interest ratio remained near 0.53.

Short-term price correlations provide context for the positioning. Over the past 30 days, the correlation between gold and crude oil was about -0.34. Silver and gold showed a correlation near 0.82, while silver and oil registered a correlation of roughly -0.15. The gold-to-silver price ratio stood near 61.7 in recent trading. Since the tentative Iran agreement, gold has outperformed other precious metals while oil traded lower.

The data record heavier new commitments and larger open-interest gains in gold futures for the week ending June 9, along with smaller open-interest growth and reduced non-commercial longs in silver. Options volumes reflect higher put activity on gold ETFs in the same period and a modest tilt toward calls on silver ETFs.