GOLD COT REPORT 8/3/12: Commercials Increase Net Shorts by 2 Million Ounces!

Submitted by SD Contributor Marshall Swing:

Commercials sold off a massive -11,093 longs and purchased an almost equally massive 8,674 shorts to end the week with 57.85% of all open interest, a huge increase of about 2.04% from the previous week in total open interest, and now stand as a group at -15,601,200 ounces net short, a dramatic increase of almost 2,000,000 ounces net short from the previous week!

Large speculators picked up 5,246 longs while covering -7,841 shorts for a net long position of 12,601,400 ounces, a increase in their net long position of 1,308,700 ounces from the prior week.

The small speculators added 450 longs while covering -6,230 shorts for a net long position of 2,994,800 ounces an increase of 668,000 ounces in their net long position from the prior week.

Large speculator contracts outnumber short speculators by more than a 2 to 1 margin but their long contract purchases this reporting period outnumbered the short speculators long purchases by more than a 10 to 1 margin.  This is a total disconnect in those investors perception of how to play this market.

Small specs covered -6,230 short contracts to the large spec’s -7,841 contracts.  That represents well over 25% of the short speculator’s current short contract position.

Interesting is the total open interest dropped almost 17,000 contracts this period.  The non-commercial or large  spreading category decreased by over 11,000 contracts, a huge decrease as these were pulled from the market and this accounts for most of the gains in total open interest percentage by the commercials.

To see the commercials sell so many long contracts on a run up in price from about $1570 to $1633 means the commercials made a whole lot of money this past week.  How much?  If we guess most of their long buying was done below $1575 and sold about $1625, from Friday through Tuesday, then somewhere in the neighborhood of $50,000,000 is possible.  Not a bad week’s work.

Always for your convenience, if you would like to contact the CFTC and express your views to them, I have provided you their phone numbers and I hope earnestly that you fill up their phone lines: http://www.cftc.gov/Contact/index.htm and email addresses as well:

ggensler@cftc.gov  Chairman Gensler

bchilton@cftc.gov  Commissioner Chilton

jsommers@cftc.gov  Commissioner Sommers

Somalia@cftc.gov  Commissioner O’Malia

mwetjen@cftc.gov  Commissioner Wetjen

dmeister@cftc.gov  Director Meister

See you next week!

Marshall