By SD Contributor Marshall Swing:

Silver COT Report 11/2/12:

Commercial paper added a significant 1,153 longs on the week and covered but -614 shorts to end the week with 46.37% of all open interest, an increase of +1.20% in their share since last week, and now stand as a group at 268,660,000 ounces net short, which is a decrease of just under 9,000,000 net short ounces from the previous week. 


Large speculators were forced out of 681 longs and added 1,238 short contracts decreasing their net long position to 181,085,000 ounces, a decrease in their net long position of just under 9.6 million ounces from the prior week.


Small speculators sold off a small 626 longs but also covered 778 short contracts for a net long position of 87,575,000 ounces a minor increase of 760,000 ounces net long from the prior week.


Overall, price did very little during this reporting period opening at about $31.70 and closing at $31.89 but with quite some volatility during the period.


At first glance, we might wonder what is going on with the major long purchases of the commercials but a look at the disaggregated commercials reveals these numbers to be mostly in the spreading category.  What is a surprise is the number of shorts covered by the producer merchant.  When we examine the number of longs sold by each of the speculators then those numbers just about equal out so the strategy must have continued from the previous week to shakeout speculator longs.  I can only deduce those speculators who sold longs also determined that bearish prices were coming in the near future.


Those speculators who sold longs and bought shorts were indeed correct as we saw the most massive raid on silver, this past Thursday by the silver commercials, since price reached a high around $35.44 a few weeks ago.  It is very doubtful those speculators were able to hold onto their shorts, Thursday, as price rose over 80 cents to a high of $32.69 Thursday morning and then was crashed to a low of $30.81 by noon on Friday.  The price rise would have tripped stops on shorts up to the high while what longs were bought into the price rise would have surely been decimated into the raid Friday morning as well as longs purchased in the previous 3 months after price rose above $31.


Price stands about $4.50 below its recent high but the producer merchant short position is still clearly dominant.  The numbers next week will be certainly interesting as far as what to expect for further price declines.


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: and email addresses as well:


[email protected]  Chairman Gensler


[email protected]  Commissioner Chilton


[email protected]  Commissioner Sommers


[email protected]  Commissioner O’Malia


[email protected]  Commissioner Wetjen


[email protected]  Director Meister


See you next week!



  1. In order to unload 193 million contracts onto the market, you must first own 193 million contracts. Did the central bankers buy hundreds of millions of contracts at some point? You’d think that event would put silver over $100, since it rises even with massive downward pressure from the derivatives market and shorts.

    • @Mick01

      Now that your in 4th grade maybe you can help me with this. Why do the central bankers need own 193 million contracts to unload 193 million contracts?

      Also why would silver be $100 if central banks bought hundreds of millions of contracts at some point?  

    • @Mick01

      I know I know you will not be able to answer any of my questions. For one thing were the hell did you get 193 million contracts from anyway?

      Oh I know your a Parrot and not a good one at that. Maybe when you want to sound like you know something you should get the terminology right “Parrot”

      Contracts are one denomination

      Ounces are another denomination

      Parrot was this article just stuck in your head from two days ago??



    • @Mick01

      Hay Micky your so fine! Your so fine you blow my mind hay Micky!

      Micky said> “When did these guys buy millions of contracts of paper silver in the first place?  Wouldn’t doubt they’re writing them from thin air.”

      This is your post within this topic

      let me help you with math Micky
      38,400 contracts equal 192 million onces.

      Where do you see that “These guys” bought millions of “Contracts”

      Hay Micky one more question??? Who are These Guys?? 


    • That’s true! The manipulation is getting way too obvious which made people like us question about these contracts. My other question is where did the banks get these contracts and where did the physical silvers that are “backing” the contracts came from.

  2. Ok, we are apparently not in agreement about what the short contracts really are, so someone needs to break the ice and try to ‘splain.
    I’ll go first and get my ass shot off, but that’s ok.
    Aren’t the short contracts generated when an entity offers to provide 5,000 oz for delivery at the agreed upon price in the agreed upon month?  That’s all they are, contractual promises to deliver if the contract stands and pays. The reason they can do this is that 99% of the contracts never reach fruition, the buyer rolls them over (to a month further out) or sells to someone else, or drops them outright. The paper swirls with only a little silver required.    
    Now everybody straighten that out, and we’ll all know.

  3. Thanks,  now then, the shorts are actually potential delivery obligations. The longs are obligated to pay those contracts they bought, in full, by the beginning of the delivery month, ‘options expiry’ day.  No one seems to care if the longs drop the ball because they get to keep the down payment, and probably didn’t have the thousand ounce good delivery bars to cover their little bet anyhow.
    C’mon, feel free to add or clarify this for me.

    • @Conax All I know is that the Cartel plays both ends. They have the power at this stage to manipulate the market in any direction they want. The up and down movements we see are all smoke and mirrors, designed to fool the ill informed. 

  4. It costs money to take on a long contract, what is the cost of initiating a short? Riight.
    There’s your malfunction right there. If the shorts had to prove they had the silver at the time they offered it for sale, we would have a real price discovery mechanism here.
    Add in the HFT games, pulling bids while painting the tape, front running real trades and so on, and you end up where we are now. At the mercy of ‘market makers’.  IOW, the flying monkeys from Blythe’s castle.  The first time they can’t deliver or buy off the longs, we’ll finally see the real value of this metal. They’ll have to go out into the market and really buy some.

    • @Conax It costs currency, not money, and they’ve have access to an almost endless stream of currency in order to manipulate the markets. They play both ends, so over the short to medium term we can forget to see real price discovery. 

    • @Contax
      One thing im not seeing in this crapy left on you own report is. How many contracts are standing for delivery?? There inlies the rub. One thing our good buddy J..a..k..e kept extensive recordes from week to week. he would calculate the standings over a few days and present a persetage. He followed a trend over years and pointed to key movements in silver spot aposed to the COT report. Looking only at this chart dosent help determining any trend on wether the commercials are getting week or strong. How many contracts Standing for delivery is key thats what we as stakers need to know.And what was the relationship in the past percentage standing aposed to spot.

    • SB statement above is factual, The Commercials, Fed, US Treasury are a combined force to manipulate the metals market. Unlimited resource of fiat to do this so don’t expect to see a fair market value in silver. And we are paying for all this manipulation.

      Silvers fair market value will be seen as soon as the fiat dollar collapses and the market with it…  

    • I s’pose the fair market value of silver after the fiat dollar collapses will be about one dollar per ounce. Then, one dollar will buy a wagon load of groceries.

    • Even if we still don’t see the real value of the metal with the market’s silver’s price, at least the premiums are going to rise. But once the bullion banks fail to deliver the physical silver and then the prices go up, more people are going to buy silver which will then completely destroy the cartel’s manipulation.

    • @Conax

      Ya thats why I was saying it has to be followed. They have a given time to give notice. In fact I just look over at Harvy’s and TF to see if J..a..k..e posted there today. If your wondering why im speling the name like that it’s being modded in my post. lol im such a bad guy.. 

  5. I know these silver shorts make money when they do this but one of these days when these peckerwoods go long and see how much money they can make in that decision the game will change forever.  The physical forces, in whatever form they take, will show the bad guys the light.  Not that I want to see them prosper once the game changes but they are smart enough to know these artificial trades will not stand forever.  100 years plus of playing this has to end. Hopefully it will be in our lifetimes, or next week, as the case may be.

  6. It doesn’t matter how the cartel does its tricks because the real physical silver’s demands will take over the manipulated market so that the real price of silver will appear. Or if prices still stay low for a long time, at least the premiums are going to rise.

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