Silver COT Report 11/16/12: Commercials Increase Net Shorts a Massive 6.4 Million Ounces!

By SD Contributor Marshall Swing

Silver COT Report 11/16/12

Commercials added a huge 3,071 longs on the week and increased a massive 4,354 shorts to end the week with 46.54% of all open interest, a sizeable increase of +0.91% in their share since last week, and now stand as a group at 254,805,000 ounces net short, which is a massive increase of just over 6,400,000 net short ounces from the previous week!

 

 

 

 

 

Large speculators increased 955 longs while adding 664 short contracts increasing their net long position to 172,050,000 ounces, an increase in their net long position of just over 1.45 million ounces from the prior week.

 

Small speculators grabbed 1,500 longs and added 508 short contracts for a net long position of 82,755,000 ounces an  increase of almost 5,000,000 ounces net long from the prior week.

 

It was a buying week with sellers nowhere to be seen.  Categories, across the board, were positive, except for a slight dip in the producer merchant longs dropping a mere 13 contracts.

 

Total open interest increased by 5,254 contracts to 144,567.  I have written repeatedly that total open interest is meaningless except as a marker of traders interest in being in the market.  It does not mean price is headed up or down but merely reflects someone’s interest in parking their money in the paper metal for whatever reason.

 

In this week’s case, if we do the math we see it is the commercials that are responsible for the lion’s share of the increase in total open interest.  Perhaps they are making it appear there are good reasons to buy in order to draw more speculators into the market?  Well, that is in effect the net result but those large speculators were cautious judging from the percentage relationship of their new longs and shorts.  They were not as eager to jump in long as were the small speculators.

 

There may be some dips in the near future since we see the producer merchant did not add long contracts though it is interesting the swap dealers actually added more short contracts than did the producer merchant.  Much is hidden in the disaggregated commercials swap dealer spreading category as it increased nearly 1,200 contracts.

 

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:

 

[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