GoldCotSubmitted by SD Contributor Marshall Swing:

Gold & Silver COT Report 1/11/13:

Commercial longs trimmed back 438 contracts on the week and covered a huge 4,509 shorts to end the week with 47.70% of all open interest, a decrease of 0.42% in their share since last week, and now stand as a group at 206,325,000 ounces net short, which is a significant decrease of 20,355,000 net short ounces from the previous week

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SilverCOT

 

GoldCot

 

Large speculators gave up 1,034 longs from their total while adding a miniscule 59 short contracts decreasing their net long position to 140,470,000 ounces, a decrease in their net long position of almost 5.5 million ounces from the prior week.

 

Small speculators removed 1,493 longs from their total and picked up a sizeable 1,485 short contracts for a net long position of 65,855,000 ounces a decrease of almost 15 million ounces net long from the prior week.

 

Silver started the COT reporting week at $30.24 and closed at $30.39 but what happened in between is hardly shown in the COT numbers.  Since Tuesday’s close price has wandered a few cents to $30.44 with some volatility in route.

 

From the previous Tuesday close, at $30.24, price went as high as $31.53 that Wednesday afternoon to a low of $29.24 early Friday morning.  That’s a difference of $2.29 in less than 48 hours with the majority of the raid taking place on Thursday afternoon.

 

Considering the commercials reduced their net short position by 20 million ounces and yet price was virtually unchanged, we have to believe the time is ripe for a dramatic price increase to their short term advantage and it appears they have merely been repositioning contracts for this purpose.

 

In 3 short weeks, those commercials have gone from almost 277 million ounces net short to 206 million ounces net short.

 

As we look at the gold side we see the commercials adding 8,893 contracts to their long total while covering 1,294 shorts.  This gives much weight to the idea of preparing for a short term price increase.  Speculators were forced out of massive long positions and even bought some new short positions.

 

But what we see with the gold swap dealers is truly telling.  They added 13,353 longs and yet the gold producer merchant only added 815 longs.  It is a safe bet most of those longs were bought after gold bottomed at $1626 but how many of those longs sold before gold reached $1678 on Thursday?

 

When commercials hold about 48% of all longs and shorts in silver and about 55% in gold is it any wonder they can move price 5-10% in a week’s time to take advantage of huge, short term profits?

 

As always, for your convenience, if you would like to contact the CFTC and express your views on the commercial trader’s unfair dominant short position, 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

SD Bullion

    • Email Uncle Tom Chilton and ask him. While we’re at it, be sure to ask them why they let Corazine off the hook of their CFTC investigation into MFGlobal. 

  1. Criminal acts will not go unpunished, sooner or later this will break and when it does I hope the entire CFTC is implicated in the cover up. Destroy their jobs and professional lives so they get to live like the rest of us.

  2. All this long this, short that, open or closed interest… blah, blah, blah… WTH does it all mean?  Are these paper pushers trading paper amongst themselves as they take turns milking a fake market that they created and now manipulate or is there anything actually real happening with any of this?  Also, are they able to buy and sell at no trading cost?  It costs us money to buy and sell things but with the volume that these people are rolling over all the time, they must be trading virtually free if they are to make anything out of this, squeezing pennies here and there and making money on extremely thin margins.  Makes me want to put a tiny tax of, oh, say, $0.25 a trade just to see what these people and the hi-freq trading guys do then.  Real investors would never notice that but a lot of the B$ traders out there would probably squeal like stuck pigs.
     

  3. Ed.b.   Agreed.  It’s called the “Tobin Tax” initiative after economist James Tobin(Nobel Prize). These market riggers use super computers and a system called High Frequency Trading. They literally may hold a position for a nanosecond. Billions of no cost trades in seconds manipulate the price. Tax those trades at $0.0001 and you’ll fix a lot of what is wrong with Wall Street. A Tobin Tax would not affect Mom and Pop, but would discourage the high frequency traders unless it made financial sense and would be a painless way for gov’ts to raise revenue.

  4. @ Ed
     
    A silver future contract is 5000 ozs, value about $150 000, and costs around $3 to buy or sell at a discount broker. That’s .00006 cents per oz – ie 6 one hundredths of a cent.
     
    $3 per transaction is for retail clients, so I’d imagine a JP Morgan with thousands of contracts would get an even lower price.
     
    So yes you are right, it costs our favorite scumbags nothing to trade in high volume.

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