Gold & Silver COT Report 4/12/13: Commercials May Slam Silver to $17!

By SD Contributor Marshall Swing: 17 silver

Gold & Silver COT Report 4/12/13:

Many writers were declaring a bottom for the silver slide after price rose from last Friday’s low of $26.57 and rose to $27.90 at Tuesday’s close.
They were wrong.
Almost all writers have previously declared $26 as the holy grail never to be broken downward again.
They were wrong. 
How low can price go?  I will repeat what Martin Armstrong has said we may see $23 and then if that, then $17 is possible.

2013 Silver Eagles (Available for now)
at SDBullion!

 

Commercial longs added 3,213 contracts to their total and an additional 2,634 shorts to end the week with 43.16% of all open interest, a minor increase of 0.08% in their share of total open interest since last week, and now stand as a group at 89,620,000 ounces net short, which is a decrease of just under 3 million net short ounces from the previous week.

 

silvercot

 

goldcot

 

Large speculators added 291 longs and 522 more short contracts decreasing their net long position to 39,575,000 ounces, a decrease in their net long position of just over 1.1 million ounces from the prior week.

 

Small speculators sold off a total 1,457 long contracts and covered 1,109 short positions from their total for a net long position of 50,045,000 ounces a decrease of 1.74 million ounces net long from the prior week.

 

Many writers were declaring a bottom for the silver slide after price rose from last Friday’s low of $26.57 and rose to $27.90 at Tuesday’s close.

 

They were wrong.

 

Almost all writers have previously declared $26 as the holy grail never to be broken downward again.

 

They were wrong.

 

From the close on Tuesday to close Friday, price has been all downhill to the tune of more than $2 down.  It is now Sunday evening and price has dropped $1.50 from the open to as low as $24.08

 

Large speculators and swap dealers were stunningly silent during the COT week as the real battle was between the producer merchant and small specs and it would appear the producer merchant had their way.  Or at least it was a few small specs who decided to get out of the waterfall’s way.

 

How low can price go?  I will repeat what Martin Armstrong has said we may see $23 and then if that then $17 is possible.

 

Last year, I shared a thought with the Doc that we could see a blowout to $16 and below, possibly a short term at $12.  While that was meant to be a private thought to the Doc, he published it, and there were 300 some comments on it.  I have an industry friend that told me last year the average cost of silver he calculated to be about $16 an ounce.  SRSRocco has published he believes true cost is around $26 an ounce I believe and he has some good points.  I tend to agree with the lower price because I believe that research is more accurate.  A lot of silver production is as a by-product of zinc and copper and therefore the cost per ounce is negligible.  Analysts shed great tears and stay up late nights trying to figure this out so they can bet on miners.

 

Could this be the big flip Jim Sinclair keeps talking about?  It could be but it is important to remember with any rush to longs by the commercials there will be a huge amount of speculators rushing to longs as well and in futures there must be a short for every long and when the general public believes there is a bottom they are not going to buy shorts anymore.  It is the large speculator hedge funds who are driving this effort to find a bottom and they paused their action last reporting period but my guess is since Friday morning they have resumed their short positioning efforts.

 

In gold, we have to go to the disaggregated commercials to see what was really going on last week and there we find the producer merchant closing positions and the swap dealers taking positions.

 

The gold swap dealers bought heavily in shorts last period and do not think for a minute they did not have an inkling that price was headed south in a big way and it has.  At this past COT close price in gold was $1584 and here on Sunday evening it hit a low of $1422.

 

Can anybody spell P-R-O-F-I-T ???

 

Quick math on 8,477 contracts at 100 ounces each from $1548 where I think they bought them, let’s round to making $100 an ounce, comes to a rough $85 million.

 

Not a bad weekend’s work, aye?

Comments

  1. This is an act of desperation.  Let them take Gold and Silver prices down to ‘Zero’, but those of us who know the truth will live by the truth, and we will hold on to our Gold and Silver and trash fiat paper ‘money’ any day of the week.  Just because they can push the prices lower does not mean they are right.  They are wrong, and they are corrupt and immoral.  That is what counts the most–to be right and sit tight.

  2. Good article Marshall hope your buddy is wrong about the $16 mark, if your right, I’ll just have to buy more but I’m also running out of Fiat.

    • I see a problem in the articles calculations.  If you’re getting silver as a by-product of a Zinc Mine then one could calculate a number such as $12 per ounce.  However, you can’t cost average because silver miners have a cost upwards of $20, $25 and $30 an ounce.  A figure like $12 just put them all out of business.  So when you start using a more dedicated operation such as a silver mine somewhere like Australia or U.S. those costs rapidly escalate.  I remember a silver scrap person that posted on SilverDoctors some time ago and they stated anything below $30 is not worth messing with.
       
      So at prices such as $16 – $25 almost all of the dedicated silver mines will start to idle or shut down plus silver scrap refiners drop off rapidly. 
       

  3. If you listen to the recent interviews by John Williams at Shadowstats plus the recent Webbot information they are both indicating some form of hyperinflation developing.  Somethings about to happen and the powers which control the economy are trying to prep Gold / Silver / Bitcoin in advance to manage their movements.
    I fear something sinister is about to be unleashed.
     
     

  4. If it breaks much lower it will be interesting to see what physical price is for the bullion that happens to be available. As posted on zerohedge, the last time we has something coordinated like this, we had a stock market crash. I have stated several times that my opinion was that the 455holes in power were beating down metals in advance of a stock market crash. 40 more buffalos on the way.
    In summation, I dearly hope the government officials, regulators, and banksters all come down with flesh eating disease.
     
    p.s. what is with all the errors on this site today? traffic or attack?

  5. Marshall is right on track… I have my sweet number too and is very close to his range! I will go all out when it hit my sweetie!
    I am so glad that I don’t listen to people like David Morgan, Jim Sinclair, Eric Sprott… These people are without facts.
    Thanks Marshall for letting me found your COT report (BTW I first read it from your own website, too bad you no longer have your own website anymore). It really makes me think twice before trusting the above so called Gurus.
    BTW, watch the S&P or Dow very closely… this will be the final trigger if I am correct.

  6. Interesting that the Gold-Silver Ratio has barely budged all day from around 58.5 – 60, considering the price plummet.
    Gold been smacked a whole lot worse Than Ag.
    That 60 value marks the top of the upper GSR downtrend channel from 2009.. and it doesnt seem to want to violate that.
    If gold hits 1300, and that 60 value holds, then silver will only drop to 21.7
    Next positive move from there might well be a lower GSR downtrend channel line target of around 25:1

  7. @Canadian_Dirtlump said…
    it will be interesting to see what physical price is for the bullion that happens to be available
    ——————————————————————————————————–
    The premium on 2013 ASE’s from APMEX is now $5.49.
    Their site shows a lot of ‘out-of-stock’ pre-1964 Silver items
    I sold five ASE’s for $39/ea over the weekend and will only sell at MY ASKING PRICE.

  8. Where is Jim Sinclair now? 
    Next time gold moves up they will all say WOW he called it.  Genius! LOL!

  9. There are no attacks, just crappy godaddy service.  Doc should switch to hostgator, they offer service agreements and smooth web performance.

  10. @jiggysmb – been on the phone with them for 8 hours already.  they offered us 1 month free hosting for the trouble.  we’ll be finding new hosting company asap.  site traffic is unprecedented and monumental.
    Thanks for everyone’s patience and understanding.

    -Doc

  11. I said it once to myself.  ”I should have sold at $40.”  Instead I bought some more at $44.  Some people did sell at $40.  Maybe they had more experience at trading altogether.  Some people run faster than I do.  That doesn’t bother me either.   It’s easy to second guess what you see in the rear view mirror.  I would trade my bullion for a turnkey operation today if the right opportunity came along.  It’s also time to go Silver shopping…again. 

  12. This is posted on the SilverGoldBull site, the Canadian site for Gold and Silver sales.
     
    Sorry, we can’t price match today because most of our competitors don’t have product available.

    • I got 2 tubes of buffalos there, less than 30 minutes later, buffalos disappeared.
       
      My invoice also says this:
      Our shipping crew is working non-stop but due to extreme demand, your order will ship within 20 business days of cleared payment.
       
       
      EVERYONE is buying balls to the wall.

    • Hi! @Canadian Dirtlump, I’m getting ready to jump on a few rolls of Buffalo’s at $2.00 over spot, just bidding my time and may wait until tomorrow just in case. Lol Weak Hands are coming out of the woodwork, forget the dealers. Lol

  13. If there are any SELLERS of silver out there, please let me know.  I will take it ALL!!!!!

  14. I called a bottom in at 15 expect it..

    • At $15 I am backing up the truck to the loading dock and stacking monster boxes.

    • @ShelbyGT500 – there won’t be any phyzz at $15.  All wholesale suppliers are almost if not entirely SOLD OUT already!
      Feel free to give us a call when you’re ready and I’ll make sure my team takes care of you…if we have anything left!

      -Doc

    • Hell No! Silver aint going to $15. At that price, if available to buy I am taking out loans.lol. I think it will stabalize at $23. $20 if you blink.

  15. I THINK 15 IS COMING no problem..I call for a bottom of 15. Tough to see…but necessary to shake the tree.
    If you are holding then hold…gutcheck time…its going to be a hell of a ride….17…is fine with me…35 will be back again in 18 months no problem

  16. Lots and lots of emails today praising Roota for insisting that everyone take Silver OUT of “their” hands and stand on the sidelines as the END GAME plays out. Got a great note from a longtime subscriber that ended with… “Bravo Roota…and thanks for the seat belts!”
     
    As you can clearly see from the price action, “they” can place the price of COMEX and LBMA paper silver at $0 or $1M with a click of a mouse. It will continue to get chaotic until the Bad Guys are dead and their computer programs shut down.

     
    The best part of all this action is that it confirms that the END is near!
     
    On a side note, I’ve used the analogy in a few interviews that an atomic bomb could go off on the floor of the COMEX and the price of silver would go down as if it’s a bearish indicator.
     
    Something pretty close to that happened over the weekend and the price of silver was taken down massively!

     
    16% of US Annual Silver Supply Just Vaporized 

    http://silverdoctors.com/10-of-us-annual-silver-supply-just-vaporized/

     

    This game will end very soon and the VALUE of the physical silver in your possession will hit astronomical heights. All YOU have to do is wait them out. If you have any pennies left continue to load up on physical silver and take it home. That is if you can find any without massive premiums!

     
    I told you all to “BUCKLE UP”…now you know why!
     
    May the Road you choose be the Right Road.
     
    Bix Weir
     
    Hope you know what is going on Bix.. I am not wavering from my position at all. Will sell my cars and purchase mass amounts of silver.. Keep smashing it..

  17. It will feel good when we see multiple $200 up days in gold and $10 up days in silver. 

  18. we broke 23.00 on the upside, will it hold?

  19. As I said earlier last week, there isn’t going to be any phyz available at these prices. What little does hit the market will get snapped up.

  20. I hope the f**k it does go to $17 because I slept in this morning and missed the boat at $22 which occurred at approximately 08:45am Singapore time (08:45pm EST in the US). Now I am pissed because it went back up to $23.60 and now hovering around $23.40.
     
    The thing is, I know that’s stupid thinking, seeing as it’s down from $28 in recent weeks, and even at $28 it’s got to be the best bargain in the world right now; but, I do hope for another plunge for that last chance to snatch another 500oz at the cheapest possible price, before there’s none left to buy…
     
    Anyone who’s panicked and sold off their load – this is a chance to scam the bangsters right back and buy it back cheaper than what you sold it for – DO IT!

  21. I smell a bear trap with buyers coming in at high premiums and then a sudden and sharp additional drop in theprecious metal prices.  Just a thought on this subject but we have been played before in the mow to high 30′s prices only to see a $4 elevator drop.  But the fact that we can buy in the mid to high 20s is still a very reasonable price that 6 months to a year will look cheap.

  22. Wow 17 dollar silver… i wonder who here was preaching this two years ago while all you were saying buy the dips… I ya, it was moi! Yes, 18 dollars is what i had in mind, then ill back up the truck as all the strong hands that bought at the top ( aka idiots) will have sold out. 
    Strong hands buy at the bottom and sell at the top not the other way around.. remember than for the next run up. 

    • No way you’re going to get any at decent premium when and if we hit $18. All was sold at $23.
      Buy now at $23 or see $5 more premium when at $18. And obviously even less stock to choose from.

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