silverCOTBy SD Contributor Marshall Swing:

Commercial longs added 1,014 contracts to their total and covered 224 net total shorts to end the week with 50.69% of all open interest, a minor decrease of 0.1% in their share of total open interest since last week, and now stand as a group at 66,090,000 ounces net short, which is a decrease of almost 6.2 million net short ounces from the previous week

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Large speculator longs decreased by 144 contracts and picked up 2,713 net short contracts decreasing their net long position to 53,970,000 ounces, a mammoth decrease in their net long position of almost 14.3 million ounces from the prior week.


Small speculators added 413 long contracts to their total and covered 1,206 short positions for a net long position of 12,120,000 ounces a big increase of over 8 million ounces net long from the prior week.


Silver opened the COT week at about $23.88 and closed early Tuesday afternoon at $23.36 for a small drop in price but since COT close price has fallen to $22.20


The most significant data point of the COT is the large speculator taking in another 2,713 short contracts after they spent the last 3 weeks covering shorts for profits.


The large speculators, or managed money who make up most of their numbers, positioned themselves for another huge drop in price.  What makes this COT murky is whether most of that drop came from Tuesday close through Friday or whether we have further to go.


It is important to note that neither of the commercials were particularly active and were relatively split in their buying and selling with the swap dealers almost a break even week and the producer merchant continuing their move towards a net long position going from about 135 million net short ounces down to almost 128 million ounces net short but neither party made overt moves during the reporting period.


In gold, the producer merchant took total advantage of all parties and picked up 13,442 longs and just 3,045 shorts so the overall goal of moving towards net long was by a 3 to 1 margin.  The large speculators continued short selling to the tune of 3,275 additional shorts so the same trends of the last month are intact in gold as well as silver.


Overall in both metals, there is absolute, collective belief on the part of the speculators that price is going lower from Tuesday’s close and so far that has played out precisely correct.

  1. Now that the COT reports are posted everywhere on PM blogs, are the (previously dumb money) small specs who read them now starting to follow the smart money commercials?
    Do they learn & evolve this way?
    Seems that the large spec hedge funds are still the contrarian indicator, with the herd mentality.
    And for anyone who hasn’t seen this, i suggest you meditate upon it…

  2. I never saw a real-time correlation laid out between the options and futures to discover how they might be used in conjunction with each other to maximize returns on a directional ‘play’. It seems that if a ‘set-up’ were in motion that correlation might well signal the structuring of it. Just a recurring muse that strikes me from time to time.

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