Gold COT Report 10/5/12: Commercials Increase Net Short Positions to 27 Million Ounces!

Submitted by SD Contributor Marshall Swing:

Gold COT Report 10/5/12

Commercials sold off -8,256 longs and covered 1,341 shorts to end the week with 56.33% of all open interest, virtually no real change from the previous week in total open interest, and now stand as a group at 26,927,000 ounces net short, an increase of 691,500 ounces net short from the previous week. 

 

Large speculators continued their seventh straight week of long buying by picking up 5,440 longs and also 1,010  shorts for a net long position of 20,832,600 ounces, an increase in their net long position of 443,000 ounces from the prior week.

 

The small speculators added a miniscule 122 longs while covering a huge -2,363 shorts for a net long position of  6,094,400 ounces an increase of 248,500 ounces in their net long position from the prior week.

 

While the commercials, as a whole, have been engaging in massive profit taking the last couple of reporting periods it appears they have leveled off on their short position accumulations and we saw the evidence of significant short covering raids this past Friday and continuing into Sunday in Asia.

Looking at the sheer numbers of short positions acquired in recent weeks by those commercials and comparing those numbers to the raids we have seen, it is clear they have only expended a fraction of their powder and we might expect other movements to the downside in the near future.

 

The -2,363 shorts covered by the small speculators is very significant as that is much higher than the 1,546 shorts they acquired the prior reporting period.

 

Another very telling number is the swap dealers only adding 143 longs this period after adding 5,443 the prior period.  That might be tipping their hand that they do not see any profit to be made at higher silver prices and supports the idea that the commercials, as a whole, have a ton of shorts awaiting near term raids.

 

This is my quote from last week’s report:

 

“Taking all the numbers into account, I did not think we have seen the last of near term short covering raids to the downside as the numbers accumulated by both commercials at these levels would not have been used up in Wednesday’s raid.”

 

Indeed we saw a raid but not the significant raid I was expecting.

 

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:

 

[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!

 

Marshall