By SD Contributor Marshall Swing:
Commercial longs sold off a total 1,326 1,037 contracts and covered 4,918 net total shorts to end the week with 48.59% of all open interest, a decrease of 1.02% in their share of total open interest since last week, and now stand as a group at 41,670,000 ounces net short, which is a decrease of almost 18 million net short ounces from the previous week, a massive net short covering of over 30% of their entire short silver position!
Large speculator longs decreased by 1,474 contracts and picked up 2,750 net short contracts decreasing their net long position to 22,955,000 ounces, a massive decrease in their net long position of over 21 million ounces from the prior week.
Small speculators sold off 289 long contracts from their total and covered 921 short positions for a net long position of 18,715,000 ounces an increase of over 3.1 million ounces net long from the prior week.
Just when we thought maybe the end of bearishness was at hand, speculators seemed to double up on their shorts, commercials went even further long, and open interest plummeted.
Commercial banks, as a whole, are only a couple of weeks away from being net long if the same turnover happens as happened this last reporting period and large speculators only need one more week at this rate to be net short.
However, the producer merchant portion of the commercial banks is still almost 131 million ounces net short and they hold most of the big cards so do not start counting those eggs as chickens yet.
In gold, the directions were almost identical to silver but by far greater percentages. Gold saw a 9% reduction in total open interest and the majority by the commercial class of traders.
In both gold and silver the large speculators took huge new short positions but the culprit is not managed money. Managed money covered a huge volume of shorts so the remaining class of large speculators and the small specs are still expecting to see prices decline from here.
But the most interesting point in the data I would like to mention is while silver was trading in a range more volatility was in gold and commercials in both classes and both metals decided it was a great time to take profits with gold leading the way.