Silver COT Report 8/31/12: Commericals Increase Net Shorts by a MASSIVE 30 MILLION OUNCES!

Submitted by SD Contributor Marshall Swing:
SILVER COT REPORT 8/31/12

Commercials sold off a massive -5,107 longs on the week and added a minor 990 shorts to end the week with 47.07% of all open interest, a solid increase of +0.60% in their share since last week, and now stand as a group at 192,870,000 ounces net short, an increase of another MASSIVE 30,000,000 net short ounces from the previous week. 

 

Large speculators gorged once again on 4,062 longs while covering -3,376 short contracts improving their net long position to 143,190,000 ounces, an increase in their net long position of over 37,000,000 ounces from the prior week.

 

Small speculators sold off -2,532 longs and covered -1,191 shorts for a net long position of 49,680,000 ounces a decrease of just under 7,000,000 ounces net long from the prior week.

 

The producer merchant now stands at 224,195,000 ounces net short.

 

The large speculators now have 20.85% of all open interest.  They have added an almost 2% share in just 2 weeks.

 

The most surprising statistic of this COT is the minor 990 shorts added by the commercials.  Considering the price was around $29.25 at last period’s close and roughly $30.85 at this period’s close, you would expect them to have added 4,000+ shorts just like the prior period as that is their typical behavior to line a price increase with shorts for a later price raid and short covering.

 

If we tally the open interest change of the commercials, we get about 6,100 contracts net change.  If we tally the large speculators we get almost 7,450 contracts net changed.  Those totals are way out of balance.  The commercials outnumber the large speculators by about 2.3 to 1 and for them to be this inactive during a major price rise is very suspicious.

 

It is almost as if the commercials are playing dead and inviting the speculators to buy longs.  I smell a fox in the hen house…

 

I say inactive in a tongue and cheek way because if we give them $2 per ounce on the sale of their 5,107 longs they made over $51,000,000.  I am sure Blythe is smiling all the way to the bank.

 

Oh, but wait…  She IS the bank!

 

As always, for your convenience, if you would like to contact the CFTC and express your views to them, 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

 

See you next week!

 

Marshall