By Debbie Carlson
Chicago -- (Kitco News) -- Gold futures volume on the Comex division of the New York Mercantile Exchange for the month of August gained 20.3% compared to August 2009, fell 46.7% versus July, the CME Group said Wednesday as it released its monthly volume report for its various markets.

Comex is part of the CME Group.

Year-to-date gold futures volume is up 45%. Gold options volume is up 108.8% versus last August and down 12.8% compared to July and up 68% year-to-date.

The strong rise in volume versus a year ago underscores the rise in appetite for the yellow metal by the investment community as a safe-haven investment. While gold volume was down for the month versus July, Sterling Smith, commodity trading adviser for Country Hedging, said the drop in volume for the month has more to do with the fact that August is a popular vacation month than anything else.

“It doesn’t have anything to do with the trend for gold,” Smith said. “To see volume down is expected.”

Gold prices were starting to rebound from the July decline in August and after the sharp price sell off in July, vacation-minded investor may have exited the yellow metal early. Smith said activity in gold has just started to return in the past five to seven days. Gold isn’t immune to the “vacation effect” as volume in most markets is down during August.

Open interest in gold futures for August was up 52.9% over August 2009 and rose 10.6% versus July as market participants retained their already-opened positions. Options open interest rose 44.5% and 11.9%, respectively.

Traders noted with Tuesday’s firmer settlement, gold closed higher on the final trading day of the month for seven consecutive months. There were some ideas with the recent strength that gold could easily take out its all-time nominal high around $1,266 (the most-active December contract’s high is around $1,276), but Smith said he’s not “happy” with Wednesday’s price action.

“It’s disconcerting. If Gold can stabilize above $1,245 and trade higher tomorrow,” it would be a better sign, he said. He’s disappointed that with the break in the dollar gold couldn’t hold firmer. Still, in the next four to five weeks he expects new highs for gold.

For the month, nearby and most-active gold futures rose 5.6% and are up nearly 14% year-to-date.

For the other precious metals, the CME Group said Silver futures volume rose 16.1% in August over last year and 52.2% over July, while options volume gained 36.1% compared to August 2009 and rose 35.7% in July. Open interest for futures rose 25.6% year-over-year in August and gained 7.7% compared to last month.

Platinum futures volume rose 52.3% in August 2010 versus August 2009 and 3.9% versus July. Open interest for futures gained 15.8% in August 2010 and 2.2% over July.

Futures volume for Palladium gained 51.9% over August 2009 and a whopping 90.6% over last month. Open interest for futures fell 8.7% and 0.7%, respectively.

In base metals, Copper futures volume rose 31.4% compared to last August and 35.3% compared to last month. Options volume was also strong at a rise of 99.6% and 49.7%, respectively. The open interest tally for copper futures saw a rise of 15.6% August-over-August and a drop of 2.8% versus July.

Total metals volume – futures and options combined - on the Comex for the month of August rose 28.9% above August 2009 levels, but fell 21.3% versus last month.

Year-to-date total volume is up 53.1% for all metals combined. Futures and options combined open interest rose 37.9% over last August and 8.5% over July.

For a more detailed breakdown, see http://www.cmegroup.com/market-data/volume-open-interest/

By Debbie Carlson, of Kitco News;dcarlson@kitco.com.

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