Monday's metals trading on the COMEX featured anomalous action in gold and silver. Last week, silver, as reported in "Silver Breaks Out, Aims for $17,"punched through resistance with a lot more vigor than gold. The metals followed through yesterday with disparate results. The active July silver contract finished more than 12 cents higher at $15.735. Nearby June gold, however, gave up 20 cents to settle at $978.60.

Gold yielded more than two dimes Monday. Gold's open interest, across the delivery spectrum, is falling while silver's is rising. Put simply, gold's liquidating. It's not surprising to see open interest in the nearby contract fall. After all, we're now in the delivery month. Aggressive longs, however, would ordinarily be seen rolling their positions forward into the August, October or December deliveries. They're not. Open interest in these months is also falling. That, together with the meager volume accompanying gold's recent highs, has bulls worried about a correction.

COMEX/NYMEX Gold (June '09)

The trading objective signaled by gold's breakout from its spring consolidation is still $10 away, but there may not be enough momentum to carry the market to it. Technical indicators are flashing overbought beacons now. Near-term support is at $966.20 and $954.70. If those are taken out, the trend retracement level at $934.70 would be in bears' sights.

So much for gold. Silver's another matter altogether. Not only did the white metal meet and exceed the trading objective forecast by its breakout, it did so while building open interest. That, in a strange way, makes silver even more vulnerable. The silver market may, in fact, be overextended with weak hands now. Near-term support for the July contract is at $15.10 and $14.73.

No matter what, silver's taken ascendancy over gold for the moment. This is aptly reflected in the metals' shifting ratios against oil. The gold/oil ratio, at 14-to-1, is now below its 200-day moving average and headed further south. Silver's ratio to oil, now at .23-to-1, has changed pitch to outrun gold's for the first time since last September.

Gold/Oil Ratio Vs. Silver/Oil Ratio

Gold and silver were fixed lower in London while COMEX traders spent the early part of the electronic overnight session nudging the metals lower before allowing prices to rise ahead of the commencement of floor trading. July silver traded between $15.45 and $15.785 overnight; June gold ranged between $970 and $984.