By SD Contributor Marshall Swing:
Gold & Silver COT Report 1/18/13:
Commercial longs beefed up 1360 contracts to their total on the week and a large 2,126 shorts to end the week with 47.96% of all open interest, an increase of 0.26% in their share since last week, and now stand as a group at 210,160,000 ounces net short, which is a slight increase of 3,835,000 net short ounces from the previous week.
Silver Bullet Silver Shield Slave Queen Collection at SDBullion.com!!
2013 Silver Eagles IN STOCK at SDBullion!
Large speculators added 1,125 longs to their total while adding 647 short contracts increasing their net long position to 142,860,000 ounces, an increase in their net long position of almost 2.4 million ounces from the prior week.
Small speculators increased 1,072 longs from their total and picked 783 short contracts for a net long position of 67,300,000 ounces an increase of almost 1.5 million ounces net long from the prior week.
Silver started the COT reporting week at about $30.39 and closed at $31.37 on a week that saw steady price increase and one mild raid. By the end of the calendar week, silver reached $31.89
This price trend is not at all surprising considering all the long buying we saw in gold from the previous reporting period. This is one of the very few weeks where total numbers of silver contracts have increased in absolutely all categories, longs and shorts.
There was a decrease in the non-commercial spreading category of almost 700 contracts and an increase in the total open interest category of 2,891 contracts so there has been a marked increase in new money entering the market with no effort to knock down price.
In gold, we see somewhat differing numbers as the speculators were forced out of almost 4,100 short contracts combined due to the steady price increase making their positions intolerable. The swap dealers were the beneficiaries of those force outs as they sold 3,522 longs for significant profits. Small speculators bought up a staggering 3,489 additional long contracts so we can bet the run up in gold price is not going to be allowed to continue much longer.
In fact, they were played like a fiddle on Thursday as within a short time price fell from $1681 to $1669 in an effort by the commercials to dislodge many of those speculator longs. Then price zoomed back up to $1687 due primarily to commercial long buying with speculators taking much of the short side of those contracts initiallty only to be forced out of those positions within another hour.
It’s a great game for the gold commercials who have 56% of all gold longs and shorts!
A fair and free market? I think not!
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
I Feel A Smack Down Coming, I hope not but just in case I’ll wait till Monday evening to buy more. Keep Stacking
@Marchas
Could possibly be, but maybe not.Silver has been fairly steadfast inspot price Fix London for days.
http://www.investing.com/commodities/real-time-futures
The shorts are most likely running a bit scared with all the Silver shortage news I would think? But what do I know? I think the sunshine is coming out and then it rains like Hell.
I’m looking for a smack down too M45….cuz I’m not done stackin’ yet. Truth be told though I expect Silver to push through $32 this week and maybe go to $34 by Feb 1.
The other thing that I am 100% sure of is premiums are going up.
WAY UP. Fully expect to see us at and then above $6 per unit on ASE’s by Feb 1. Hope I’m wrong on this one….
Not so sure ASE premiums will go up too much if the real wannahaves can score some once in a while. The alternatives will need to be depleted also. Maples, foremost. Then all other low-premium alternatives. Especially in the America’s, bars are a cost-effective option (not so at all in Europe, due to VAT).
Rather than chasing the ASE’s which are in short demand (but minted in highest numbers ever) seems a waste of money. Go for what’s low premium now, and get maximum ounces.
I think someone is trying blow pixie dust up my tan track and calling it sunshine. These sons of bitches never seem to stop. It’s like the Terminator. He doesn’t feel pain and he never even gives up. Anyone got a 2,000 ton vice?
They can not resist the market. They are doomed. It is only a question of time. China, India, Russia, Brazil and so on – they all play on our side. Cartel eventually will be left without his pants – with bare ass.
Pump and dump, it will continue until we have a catastrophic event in the financial world.
These naked short manipulation games only work when there is ample supply. Unless they have significant physical stock somewhere then this game could unravel. This is another one of those shots across the bow just like silver hit $48 / oz in 2011. The question is what will they try and do this time?
If they knock silver down to $25 then demand will only surge higher. If they raise it to $40 or $45 to curb demand they put themselves in jeopardy of losing a lot of money from all of these massive silver shorts.
Pass the popcorn as this will be interesting to watch.
That is the odd-ball part of the paper market. The vast majority of people who invest in it do not want physical metal. They want a paper investment that mimics the price moves of gold and silver and that settles its wins and losses in paper dollars. They have zero interest in buying any physical metal that they then would have to transport, store, insure, secure, and then later sell to realize their profits.
A small but growing number of investors do want physical metal and are buying futures contracts specifically with the idea in mind of “standing for delivery”, which is to say taking physical metal to settle their contracts. The entire commodity futures market works on this principle. What is clouding the issue here is that leverage has crept into the picture so that profits can be maximized for the amount of money invested in the futures contracts. Various numbers for the leverage abound. Jeff Christian once said that there were 100 paper ounces of silver out there for each physical ounce, so that would be a 100:1 leverage. At that rate, one could bet $100 and win $10,000. They could also lose their $100 but only if they could manage a stop loss type order to limit their market liability. Without that, they could also lose $10,000. I am assuming that they can limit their liability, else the wild swings in PMs in general and silver in particular would be far too risky a bet.
I am not an expert in such things and only bring it up as part of the conversation here. In any case, it is the idea of leverage that matters, for what happens if there is a 100:1 leverage and MORE than 1% of the investors stand for delivery? That would mean that the people running the futures market did not have all of the silver they needed to meet the demands of their clients and a “failure to deliver” event could occur. This would send a tremendous shock-wave throughout the futures markets, causing MANY of those investing there to abandon those markets. They would have to because the entire value in these markets is that they offer investors a choice of a commodity OR a cash settlement for a contract. Without that ability, there is virtually no reason to assume the level of risk that futures carry, even if one is not planning to settle for metal because there could come a time when they would want that and not be able to get it.
The other option for those running the futures market, such as the COMEX or the LBMA, would be to go onto the open market and buy enough physical metal to meet the demands of their customers who stand for delivery. The fly in this ointment could very well be that there is insufficient metal available to meet the demand, so even if COMEX and LBMA are willing to meet the demand, they can’t if it isn’t available.
These futures contracts are not like a lot of other investments. They clearly state the obligations of buyer and seller, part of which is immediate payment of the contract on the specific date that the contract matures. The contract holder can then decide to “roll over” the contract into a new contract, pay their losses in cash, or accept their winnings in cash. Since the contract seller needs some time to get the physical metals (or other commodity) for delivery, contract holders have to file some paperwork specifying that they want metal and not dollars. By these notifications will the seller know how much metal and how much cash they will need or will receive prior to the maturation of the futures contract. I do not know how much time is allowed for this but it should be written into the contract. At least a month seems likely.
My theory is that MF Global was sacrificed because too many of their clients were standing for delivery and the COMEX could not meet their demands. Rather than allowing MFG clients to cause a futures market failure to deliver event, it is possible that the entire company was tossed under the bus so that this could not occur. Yes, I could easily be wrong about this but it certainly seems to fit the info that was released to the financial press from various sources inside MFG and the bankruptcy proceedings. Unless additional info is forthcoming about the nature of MFG’s collapse, such as who supposedly ordered the risky bets on European bond interest rate swaps, who transferred large amounts of money from client accounts, and where that money actually went, I will remain skeptical of the explanation by MFG’s management for it. I am especially skeptical of Jon Corzine not knowing how that happened or where the money went. I believe that the Sarbanes-Oxley law requires the CEO and CFO of a fiduciary company to know such things at all times and to sign documents to that effect. If so, then admitting that he did not know these things when he met with congress about the MFG collapse seems an admission of violation of that law. In spite of all this, Corzine is free as a bird and having a great time in the Cayman Islands, a notorious Caribbean off-shore banking mecca. Surely, he was not down there checking up on the missing $1.2B that “disappeared” from MFG client accounts? Nah, must have just been working on his tan. That’s all. Nothing to see here. Move along, move along.