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Old 01-04-2013, 03:32 PM   #21
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I'm looking forward to next week's COT report which will cover this week's trading activity.
Todays report just covers Dec 24th-31st:



There's nothing special in it as this was thin holiday trading with closed exchanges on the 25th, 26th, 28th and 29th. It basicly just covers two trading days: the 27th and the 31st of December. Notable however is the fact that the activity in silver points to mild short covering on behalf of the commercials whilest nothing comparable happened in gold.
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Old 02-01-2013, 05:56 PM   #22
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Pretty interesting developments in the recent COT data:

There's a pretty notable diversion between positioning in gold and silver going on.

As you can see below, commercials have covered their shorts quite significantly in gold. Especially swap dealers reduced their net short position by nearly 40% in one week. Swap dealers are counterparties to trades that take the opposite of their positioning. Therefore it seems that there has been heavy accumulation of shorts in the over the counter market. At the same time speculators also reduced their net long gold positions quite a bit by 20%. Notice the similarity in the amounts of contracts between the swap dealers and the speculators in gold. Neither commercial net short positioning nor speculative net long positioning is at levels that would suggest an immediate bottom. But the significant reduction in open interest in a sidewards market is a good sign.

Now switching over to silver, the picture is completely different. Open interest has continued to rise. Commercials have increased their shorts by 6% and specs put on 10% more longs. It looks like a showdown between these groups is in the cards. Sadly, usually the shorts are winning these fights, ie silver might be up for a correction. Also note that the swap dealers haven't changed their net positioning in silver at all.

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Old 02-01-2013, 08:15 PM   #23
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Can you help me understand this chart a bit more? I can't see what is a short/long or really anything because there are no labels that I recognize.....
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Old 02-02-2013, 07:13 AM   #24
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This chart shows the net positioning of various groups of investors in the futures markets for gold and silver at a specific date (the last two Tuesdays) as published by the CFTC each Friday.

"Producer / Merchant" + "Swap Dealers" = commercials
"Managed Money" = speculators

The numbers are net, i.e. longs minus shorts for each category. If the result is positive, they're net long. If it's negative, they're net short.

E.g. for gold
"Managed Money | 76,501 ..." means speculators are 76,501 contracts net long.
"Swap Dealers | (35,814) ..." means swap dealers (as part of the commercials, see above) are 35,814 contracts net short. The brackets have the same meaning as they would have in a balance sheet. They're indicating a liability, the short. A short is a liability, because it's an obligation to sell metal at a fixed date in the future.
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Old 02-02-2013, 10:03 AM   #25
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Ed Steer thinks the increased short position in silver may be due to an error in reporting (not sure I agree with that, but who knows?). However he includes an interesting comment about Ted Butler's idea on why the significant increase in silver's short position. The pertinent part is this:

Quote :
Ted's thinking on this is radically different. First of all, instead of covering short positions during the reporting week, JPMorgan added another 2,000 contracts to their already obscene and grotesque short position, which now sits at a bit more than 33,000 contracts. The small traders decreased their long positions and increased their short positions on that price decline...which is precisely what one would expect of them. But the big surprise was that the brain dead technical funds increased their long position by 3,711 contracts, instead of reducing it...which is NOT the action that one would normally expect on a week over week price decline. Ted is speculating that a surprise buyer shows up in the Non-Commercial category...and this forced JPMorgan et al to short massive amounts of the metal in order to prevent the price from blowing up.

I sure hope he's right...but I will be waiting to see if there is any corrections made to the silver portion of the COT Report as the week progresses.
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Old 02-02-2013, 02:08 PM   #26
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Don't know if it's important, don't understand comex that well -

http://harveyorgan.blogspot.co.uk/

Quote :
In the delivery schedule for gold we lost some gold to the avarice of Blythe Masters but not much as 42.1 tonnes of gold still stands for delivery. You will recall previous months that after first day notice, the first few days we witnessed a considerable drop in gold ounces standing. Not this month!

Dave from Denver noted that in Shanghai a total of 31 tonnes of gold stood for delivery Thursday night.
If you add the comex gold to Shanghai delivery gold we have 73 tonnes of gold standing which represents almost 40% of annual gold production. It seems to me that the physical markets are truly on fire!
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Old 02-05-2013, 06:25 AM   #27
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Originally Posted by swissaustrian View Post:
...
Now switching over to silver, the picture is completely different. Open interest has continued to rise. Commercials have increased their shorts by 6% and specs put on 10% more longs. It looks like a showdown between these groups is in the cards. Sadly, usually the shorts are winning these fights, ie silver might be up for a correction. Also note that the swap dealers haven't changed their net positioning in silver at all.
...
Biased commentary is biased, but interesting food for thought:
Originally Posted by John Embry, Sprott Asset Management :
...
The open interest in silver continues to amaze. We are just not seeing a clean out in the open interest in the silver market, even when the price is driven lower.

I believe we may be finally approaching a commercial signal failure where the shorts get overrun. This is a moment all of the silver bulls have waited for, and even though it hasn’t happened yet, I think we are setting up the pre-conditions for just such an event.”
...
http://kingworldnews.com/kingworldne...l_Failure.html

Door #1:


Door #2:

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Old 02-05-2013, 09:15 AM   #28
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Originally Posted by PMBug View Post:

This is EXACTLY my concern.. We've heard about this for soooo long. How long will it take to know how much is standing for delivery officially?
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Old 02-15-2013, 10:01 AM   #29
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No commercial signal failure this time. Bullion banks won again.
I'm looking forward to tonights COT report. It's not gonna cover todays raid, though. We'll have to wait until next Friday to the impact of that on the paper markets.
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Old 02-15-2013, 04:14 PM   #30
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The COT data as of Tuesday Feb 12th is out.
Note that gold was above 1650 and silver above 31 back then! The trends likely intensified significantly until today.

First gold: Managed money had already capitulated reducing net long positions by 15% while the commercials covered only 9% of their net short position. The bullion banks obviously knew that they should hold on to their shorts for a few more days The net long positioning of managed money at 66'582 contracts is actually lower lower than in last May in the depths of summer depression for pms: http://www.pmbug.com/forum/f13/open-...-679/#post9099 The massive decrease in swap dealer net short positioning indicates that there has been a lot of hedging going on in the over the counter market: Swap dealers are taking the opposite side of the trades of their counterparties. If they're reducing their net short postioning it means that they sold fresh otc shorts. The fact that total open interest, ie the number of all outstanding contracts rose a bit while net positioning of commercials and speculators tended lower means that both sides are hedging instead of outright selling / closing positions.

Moving on to silver:
Managed money longs have been reducing their net positions somewhat, we're still not anywhere close to the levels of last summer, though. The commercial net short position was lowered by 10%. Once again the major reduction came from the swap dealers, however. As I said, this means there's a lot of hedging going on in the otc market. Open interest rose by 1%, too. Overall, the net positioning in silver doesn't suggest that silver is about to turn arround. Speculative longs just seem to refuse to give up.



Again, let me be clear: The picture as of today should be much more bullish given the 2.7% loss for gold and 4% loss for silver since Tuesday. Next Friday's report should clarify that
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Old 02-16-2013, 07:50 AM   #31
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Goldmoney on the differences in gold and silver short positioning by US banks. Note that the data is as of the end of January!

Quote :
Gold market report: spike in banks' net short silver position
2013-FEB-15

Silver bars Last Friday night (European time, 8 February) the Bank Participation Report for 5 February was released. This showed that US banks reduced their net short gold position by 12,886 contracts over the month of January, while non-US banks increased theirs by 2,887 contracts. This is evidence that the US banking community is aggressively closing its short positions. A little of this was picked up by the non-bank commercials (mostly mines, refiners and processors) whose net shorts increased by 6,512 contracts to 56,573.

In silver they were unable to close down their positions – the US banks increasing their exposure by 7,956 contracts over the month
. The non-US banks increased their short positions by 457 contracts, representing over 42 million ounces between them to give a total short position of 277,810,000 ounces, the second highest on record.

The two charts below show the contrasting positions for US banks in gold and silver.





We can be sure that the massive short position in silver is causing difficulties for the banks concerned, because of the lack of physical supply. Therefore, the bullion banks have an exposure which appears to be out of control. While they frequently conduct bear raids (which are more successful in gold) they face the risk in silver of themselves becoming victims of a bear squeeze. Unusually, they have got themselves into this mess on a low silver price, and it is roughly double the short position than when the silver price was over $40. This being the case, when silver turns up the banks are likely to be very badly squeezed, throwing up enormous losses. Meanwhile, the non-bank commercials have kept a level head and reduced their net short position by 2,268 contracts to 3,616.

It is against that background that gold and silver prices declined this week, with gold falling about $30 to $1,630 level, and silver by $1.50 to around $30.25. Given that the bullion banks are trying to close down their positions, one would expect open interest to fall. Instead they have both risen, gold by over 25,000 contracts and silver by 2,936 contracts, indicating that buyers are taking the opportunity to accumulate at these low prices. We look forward to next week with interest.
http://www.goldmoney.com/gold-resear...gmrefcode=gata

My take: Maybe bullion banks are covering their gold shorts with gold which is leased from Western central banks. They can't do that in silver, however, because Western central banks have no silver to lease.
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Old 02-16-2013, 08:05 AM   #32
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Old 02-18-2013, 07:09 AM   #33
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Originally Posted by Harvey Organ :
... In silver strangely the CME reported a gain of 1417 contracts up to 154,364. We are now at a two year record high in silver OI with a lower price in silver ($29.86 today vs $49.00 in April 2011), In gold, the bankers are getting their way as the OI has fallen to 442,000 contracts. Earlier this year it hit its low point just below 400,000. In June 2010, it hit it's all time high of 603,000 contracts. The problem this time for the bankers is that the silver OI is ramping higher while the OI in gold is being crushed. Why? it seems that physical silver is becoming scarce and producers are hoarding the metal (see below). ...
It's hard to follow Harvey's blog some times (or at least what he's referring to by "see below"), but I think he's referring to the report about the German automaker stockpiling silver because they are having problems with sourcing it reliably. If it's true that producers are "hoarding" the metal, it would appear that they listened to Mr. Sprott.
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Old 02-18-2013, 07:18 AM   #34
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Well, the shortage meme is not proven yet. Silver is neither in backwardation nor have COMEX inventories plummeted (to the contrary). Premiums haven't skyrocketed either. I don't buy the shortage story until I see hard evidence. The only indication I see is the growing oi at the COMEX and that could have other reasons.
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Old 02-19-2013, 09:28 AM   #35
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I don't agree with everything Mr Arensberg says, but it's still a good read.
Quote :
Monday, February 18, 2013
Gold COT Imbalanced, Becoming Bullish

Changes in gold futures positioning of the largest reporting traders very interesting and have now become contrary bullish.

SOUTHEAST TEXAS – Changes in the positioning of very large traders of paper gold futures in the most recent Commodity Futures Trading Commission (CFTC) commitments of traders (COT) report (February 15 for data as of the 12th) are important and very unusual.

As Got Gold Report Subscribers (Vultures) already know, because of our commentary directly in the linked technical charts, the aggressive sell down this past week (Gold -$57 to $1,609 and Silver -$1.59 to $29.76) was not, repeat not, fueled by aggressive selling by the Big Hedgers or bullion banks (contrary to repetitive uninformed or misinformed bloggers who, embarrassingly, try to fit everything into a single bank-hating theory).

Instead, with gold-buying China out of the market this past week for their New Year holiday, Japan out part of the week, an earthquake of sorts caused by long-only pension funds announcing an exit from commodities
(well after the fact for many of them we might add), media focus on two or three high profile actors who sold positions in SPDR Gold Shares (GLD) (Soros, Bacon, et al, back in Q4 of 2012, but only announced in Form 13 filings this week) ... and with The Big Markets still showing surprising strength, the selling pressure on gold comes not from the bullion banks or the hedgers they trade for, but from Managed Money – the trend following Funds and the investors they trade for.

As the data will show in just a moment, we have reached a point where the positioning of the largest traders of gold futures is very imbalanced. The setup is practically begging for a massive, very violent reaction just ahead.

We only very rarely see this kind of imbalance, but when we do it can get pretty dangerous for traders on both sides of the battlefield for a very short period of time. Huge elephants, capable of buying/selling and influencing hundreds or even thousands of contracts in minutes, are battling it out now in the futures – and in the OTC physical and forwards - and we mice need shelter until the battle has declared a new victor. Having been profitably stopped out of gold futures last month, we watch the battle underway from the safety of a “sideline cave!”

To understand what is going on we first have to see where the traders were positioned as of the close on Tuesday, Feb 12. (Gold closed $1,651.07 already down $21.66 or 1.3% from the prior COT week. Silver $31.09, down $0.70 or 2.2%.) So the sell-down was already well on its way and the bears had the ball then. Recall that was the second day of China being mostly out of the physical gold market. Never forget that futures answer the physical market, not the opposite.

As the data will show, what we have is one of the rare instances when the usually long Funds (Managed Money) have taken an unusually large (actually record large) short position even while maintaining significant long positions. As the data will also show clearly the usually short Producer Merchants, the natural hedgers and the bullion banks they trade through, have not increased their hedging and instead have seen fit to have a very low level of hedging with gold having fallen to the $1,650s. We suspect that the very smart hedgers are even less hedged now with gold having blown through stops to test $1,600.

The growing selling pressure finally broke through the level where a large number of stops had accumulated on Friday, giving the Funds an unusual short term victory – on the short side.




The normally mostly long Funds have engineered a short term play normally attributed to the guys on the other side of the battlefield. Namely, they just pulled a short raid on gold. The Big Irony is that despite the obvious and clear data to the contrary, one particular camp out there will continue to blame the bullion banks for this sell down.

To continue reading, please log in or click here to subscribe to a Got Gold Report Membership
http://www.gotgoldreport.com/2013/02...g-bullish.html
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Old 02-19-2013, 09:42 AM   #36
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There's a very interesting disconnect between gold volume and silver volume today. Gold volumes are well below the volumes of the last days while silver volumes are at the levels of last week. Subsequently, silver is making new lows in the current downmove while gold holds 1600 pretty easily. As the COT data above suggests, gold long speculators have already capitulated while silver specs haven't. Maybe the dichotomy of volumes in gold in silver indicates an ongoing silver capitulation.
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Old 02-20-2013, 08:14 AM   #37
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Detailed 20 pages must read analysis of the current COT data:
http://treo.typepad.com/files/201302...-cot-notes.pdf
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Old 02-22-2013, 03:24 PM   #38
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COT data as of Tuesday 19th is out. Remember: gold was at 1604 and silver was at 29.45 then. The real capitulation happened on Wednesday, so the market is probably even more cleared of weak hands by now!

As one would expect, NET postioning of all categories of traders changed dramatically.

First gold:
Commercials (producers + swap dealers) are now NET short only 131000 contracts, ie there's not a lot of hedging going on. Speculators were really slaughtered, reducing their net long position by a monstrous 33%. Totally strange is the fact the open interest changed by ZERO. You've seen the changes in postioning and in the end the exact same number of contracts is outstanding. What's the probability of that? I say ZERO. This number makes the whole dataset appear extremely questionable.
Anyway, the positioning of the paper market is now extremely bullish. Historically strong rallies followed such scenarios.

Moving over to silver: As I wrote last Friday and several weeks before, silver paper positioning wasn't that contrary bullish. The new data shows that the situation has gotten significantly better, but it still isn't as extreme as it is in gold. Commercials have covered their net short postion significantly. However, the swap dealers have contributed unproportionally much. This means that their counterparties in the over the counter market have put on tons of new shorts. Silver swap dealers are now net long, ie the otc market is net short! If these otc shorts get caught on the wrong side of the trade, they'll be burned in a short squeeze.
The speculators have also been slaughtered in silver, reducing their net long position by a whopping 30%. They're still not a total capitulation levels as of last Tuesday: http://www.pmbug.com/forum/f13/open-...679/#post12329. Open interest in silver has risen again which just shouldn't happen during a crash. I have no explanation for that.


Summary: BUY now!
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Old 02-22-2013, 03:54 PM   #39
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Originally Posted by swissaustrian View Post:
...
Summary: BUY now!
...
I'm a simple guy. That's simple.
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Old 02-22-2013, 05:19 PM   #40
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Sorry swissaustrian,
as I think you are gonna see one more major dip on Monday. This will start Sunday night. For what ever reason the stock futures will get Hammered before the open on Monday (Thats why they goosed the market today) (You would think the opposite would happen market down metals up. But we are dealing with criminal intent here and they have conditioned the masses that when the market deflates so do the metals. You know the old saying ? (Tell or telegraph a lie long enough and the masses will begin to believe it) Precious metals will take one more "MONSTER" plunge before the options expiry at the close of the market on Monday. Then Tuesday I still think you will see some pressure because that will be notice day (notice from the option holder that they elect to exersise the option and take physical delivery) The key for the Comex is to stop people from taking physical delivery. (I know the Comex does not settle in metal, but in cash. It's the psyc that counts) Then on Wednesday I see a start of a rebound. This whole paper market is a scam and I really think people are starting to see it. Buy half over the weekend, and half after Tueday would be my recommendation "Spread the Love" so you don't get smoked by the pressman in control of the printing press.

Good luck and thanks for the data !
Originally Posted by swissaustrian View Post:
COT data as of Tuesday 19th is out. Remember: gold was at 1604 and silver was at 29.45 then. The real capitulation happened on Wednesday, so the market is probably even more cleared of weak hands by now!

As one would expect, NET postioning of all categories of traders changed dramatically.

First gold:
Commercials (producers + swap dealers) are now NET short only 131000 contracts, ie there's not a lot of hedging going on. Speculators were really slaughtered, reducing their net long position by a monstrous 33%. Totally strange is the fact the open interest changed by ZERO. You've seen the changes in postioning and in the end the exact same number of contracts is outstanding. What's the probability of that? I say ZERO. This number makes the whole dataset appear extremely questionable.
Anyway, the positioning of the paper market is now extremely bullish. Historically strong rallies followed such scenarios.

Moving over to silver: As I wrote last Friday and several weeks before, silver paper positioning wasn't that contrary bullish. The new data shows that the situation has gotten significantly better, but it still isn't as extreme as it is in gold. Commercials have covered their net short postion significantly. However, the swap dealers have contributed unproportionally much. This means that their counterparties in the over the counter market have put on tons of new shorts. Silver swap dealers are now net long, ie the otc market is net short! If these otc shorts get caught on the wrong side of the trade, they'll be burned in a short squeeze.
The speculators have also been slaughtered in silver, reducing their net long position by a whopping 30%. They're still not a total capitulation levels as of last Tuesday: http://www.pmbug.com/forum/f13/open-...679/#post12329. Open interest in silver has risen again which just shouldn't happen during a crash. I have no explanation for that.


Summary: BUY now!

Last edited by stockjockee; 02-22-2013 at 05:33 PM.
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