Submitted by SD Contributor Marshall Swing:
Gold COT Report 9/21/12:
Commercials added 5,654 longs while also picking up a large 18,196 new shorts to end the week with 57.17% of all open interest, an increase of about +0.35% from the previous week in total open interest, and now stand as a group at 24,963,300 ounces net short, a significant increase of 1,254,200 ounces net short from the previous week.
Large speculators upped their long buying pace slightly adding 10,585 longs while also adding -1,486 shorts for a net long position of 19,111,500 ounces, an increase in their net long position of 909,900 ounces from the prior week.
The small speculators tapered their long additions picking up 1,975 longs while covering -1,468 shorts for a net long position of 5,851,800 ounces an increase of almost 350,000 ounces in their net long position from the prior week.
Long and short open interest positions for our three major traders continued in exactly the same direction for the fourth week in a row in each category except for the short positions of the large speculators who sold net short instead of continued their short covering trend.
The real story is told, however, in the disaggregated commercials where we see tremendous changes in open interest positions by the producer merchant who sold off 28,383 long contracts at what one would assume to be absolutely huge profits possibly over a hundred million paper dollars. That is almost 3,000,000 paper ounces of gold sold for tremendous profit.
This very well could signal the end of the gold run for a while as a selloff of this magnitude certainly signals a change in strategy or a milestone of some sort.
During the same period of this massive long selloff came an equally impressive short covering of -29,930 contracts by those same producer merchants.
At the same time of these massive selloffs by the producer merchants, the swap dealers have taken up the short work ethic in purchasing 14,565 short contracts which they may have chosen to unload early this morning when gold was knocked down as low as $33.63. A raid like this in the Asia market is very, very rare.
Also, for those who follow the numbers from week to week, the spreading category of the commercials increased 108% this reporting period from 62,066 to 129,188 contracts.
Expect a lot of volatility ahead as these contracts are available for trade.
It would certainly appear the producer merchant and the swap dealers are playing tag team for who is going to knock down the price of gold next. This is very similar to what I reported in silver for this period though the gold swap dealers did not pick up an equal percentage of shorts sold by the producer merchant as did their silver counterparts. That sounds about right as there is usually more volatility in silver especially now that the gold to silver ratio is lower over the past month.
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/
email@example.com Chairman Gensler
firstname.lastname@example.org Commissioner Chilton
email@example.com Commissioner Sommers
Somalia@cftc.gov Commissioner O’Malia
firstname.lastname@example.org Commissioner Wetjen
email@example.com Director Meister
See you next week!