A Look At The Latest CoT

The "Commitment of Traders" report is issued every Friday. It is a summary of positions from the previous Tuesday. Since it doesn't tell us about the most recent three days, it's not always the easiest thing to interpret. However, this week, several things jumped out at me and I felt they should be addressed.

First of all, Harvey always does a bang-up job of reporting these numbers every Saturday and he does it in a format that is readable and understandable. I suggest you check it out every weekend:

http://harveyorgan.blogspot.com/

I lifted the spreadsheet below from his site so that you have an easy reference for this post.

Gold COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
259,388
55,815
14,425
163,472
412,678
437,285
482,918
Change from Prior Reporting Period
-32,586
11,016
-1,289
8,458
-29,970
-25,417
-20,243
Traders
213
76
73
51
57
296
177
 
 
Small Speculators
 
 
 
 
Long
Short
Open Interest
 
 
 
72,938
27,305
510,223
 
 
 
6,237
1,063
-19,180
 
 
 
non reportable positions
Change from the previous reporting period
 

Again, keep in mind that these numbers are basis the Comex close on Tuesday of last week. For the reporting week, gold closed up $22 on Wednesday the 3rd, down $7 on 8/4 and down $7 again on 8/5. Last week, it was up $62 on Monday and $31 on Tuesday for a net change over the five days of +$91.

If you read any analyst opinion or watched any CNBC late last week, you were "informed" that the "gold bubble was popping" after "speculators" had succeeded in driving the price to $1800. Hmmm. Now, is that really what happened or is that simply the SPIN put out by the Cartel's Agents of Disinformation? A simple review of the chart above gives you your answer.

Note that, over the reporting week, when gold was rising over $90 and creating the "bubble", the "large speculator" category saw their total holdings decline by almost 10%! Speculators were selling, not buying. Well, who was buying then? The Cartel! The Forces of Darkness covered nearly 30,000 of their short contracts. Bubble, my ass! The Cartel was looking to cover as quickly as possible and they lost a lot of money in the process. A temporary bubble would form in the exact opposite conditions where speculators are rushing into gold and The Cartel is eagerly supplying their unbacked paper.

Note, too, that while gold was rising $91, total open interest was contracting by about 3.5%. This is a very bullish development, too.

So what can we conclude from this info?

1) The loss of the U.S.A.'s AAA rating must have scared the living daylights out of The Cartel. With a total disregard for P&L, they attempted to orderly cover as many contracts as they could.

2) Large speculators (managed money) took a lot of money off the table. This money will, eventually, be placed long again. Of that, you can be certain.

3) Take a moment to recall the names and faces of those who were telling you about a "popping bubble" in gold late last week. No responsible reporter or analyst would have made that claim without first reviewing these numbers. You can therefore deduce that:

   a) the "bubble-callers" are either completely clueless about how the gold market works and should henceforth be ignored.

   b) the "bubble-callers" know exactly what they are doing. They are purchased Agents of Disinformation for The Cartel. Do not, under any circumstances, take these people seriously. Their job is to sow seeds of doubt in your mind and get you to sell your PM insurance.

CONCLUSION:

Despite reports to the contrary, gold is not, and never was, in a bubble. In fact, the large movement out of gold by the large speculators creates a very bullish atmosphere for gold as that money will, most assuredly, be coming back into the market soon. Also, those "in the know"...The Cartel...are so frightened by the potential for even greater future losses, they are moving to cover as many shorts as possible in order to minimize future damage. The "dumb money"...the HFT and managed money specs...are on the sidelines while the "smart money" is covering against future moves. This is quite a bullish scenario and one that definitely portends higher prices in the near future.

Next, let's take a look at the silver CoT.

Silver COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
32,101
13,713
18,761
36,394
71,735
87,256
104,209
-6,164
299
-2,044
5,953
-3,294
-2,255
-5,039
Traders
74
40
52
35
43
139
111
 
Small Speculators
 
 
 
 
Long
Short
Open Interest
 
 
 
28,683
11,730
115,939
 
 
 
-2,191
593
-4,446

Note that the structure is the same with large specs liquidating almost 20% of their longs while The EE covered slightly more than 3,000 shorts. Do you recall the price action during these five days? Let's just say it was a little different than gold. Silver rose $1.67 on 8/3 and then it fell $2.33 on 8/4 and fell another $1.22 on 8/5. After being up well over $2 on 8/8, it settled up just $1.17 and the gave back another $1.50 on 8/9. This gave us a net change for the reporting period of down $2.21. 

Looking at the CoT, the price action and the low level of total open interest, we can presume the following:

1) The decline in silver was led by speculators fleeing the market.

2) The Forces of Darkness saw this price weakness as an opportune time to cover some of their shorts.

CONCLUSION:

​The bullish case of silver is at least as strong, if not stronger, than gold. Total open interest is now as low as it was in late June and is down over 20% from the highs of late April. While the extraordinarily high margin rates for silver will make it difficult to reach the late-April levels again, total OI of just 115,000 is still very low. Over 60% of the total open interest is represented by EE short positions while large specs only make up 20%. For reference, in late April, the EE short position dropped to about 50% of the total while the spec longs rose to about 30%. As we now know, 1.5:1 is not a very good ratio for future upside. The 3:1 current ratio is very bullish and leads me to believe that silver is primed for a significant UP move in the weeks and months ahead.

It's going to be another crazy week in the PMs. Expect a continuance of the volatility we saw last week. Though I still love gold, I plan to lighten my gold positions just a little this week and swing some funds back into silver. I'm more encouraged than ever about the near-term future for PM price. The fundos have only gotten stronger in the past few weeks. Amazingly, at the same time, the market internals have improved, too. This combination sets us up for some powerful moves in the weeks ahead. Get ready.  TF

325 Comments

Dr Durden's picture

1st

1st

zilverreiger's picture

nope you missed the initial

nope you missed the initial double post dr durden

Vernon Wormer's picture

Great work TF. Keep it up.

Great work TF. Keep it up. Sounds like a winner to me.

jimijon's picture

Great work and an unabashed promotion

If you or if you know of a business that will barter for services or product for gold or silver please have them visit and register over at http://www.bartercalcpro.com

It's free of course, new (probably rough around the edges), but will be improving weekly.

Also, any contributors are welcome too.

cheers

RuNuts's picture

@Eric Original Re: HAM ALERT!!

http://www.walgreens.com/store/c/celebrity-boneless-cook-ham-with-natura...

Any idea if the 3 limit applies online?

Edit: order took online for 12 @ $30

Gramp's picture

Japan facing flak for hiding

Japan facing flak for hiding Fukushima radiation path

Meltdowns at three of Fukushima Daiichi's six reactors went officially unacknowledged for months.

The withholding of information was akin to "murder."

In interviews and public statements, some current and former government officials have admitted that Japanese authorities engaged in a pattern of withholding damaging information and denying facts of the nuclear disaster - in order, some of them said, to limit the size of costly and disruptive evacuations in land-scarce Japan and to avoid public questioning of the politically powerful nuclear industry.

As the nuclear plant continues to release radiation, some of which has slipped into the nation's food supply, public anger is growing at what many here see as an official campaign to play down the scope of the accident and the potential health risks.

Seiki Soramoto, a lawmaker and former nuclear engineer to whom Prime Minister Naoto Kan turned for advice during the crisis, blamed the government for withholding forecasts from the computer system, known as the System for Prediction of Environmental Emergency Dose Information, or Speedi.

"In the end, it was the prime minister's office that hid the Speedi data, because they didn't have the knowledge to know what the data meant, and thus they did not know what to say to the public, they thought only of their own safety, and decided it was easier just not to announce it," he said.

¤'s picture

Uncle Sam to European Rescue/Of course

The Fed. has been backstopping the whole world for years by printing and guaranteeing loans. This moment in history is akin to a modern day Marshall Plan that is trying to keep them on life support for the benefit of the U.S.   We do not (i think) want Europe to be bailed out by China and influenced by China the way we were able to do so after WWII.

Sorry Doc...trying to find the latest Euro Bailout news and that Gasparino reference. I think were going to find out soon enough this afternoon on the talk shows or before the Asian markets open.

http://video.foxbusiness.com/v/1105622877001/us-taxpayers-pouring-cash-into-european-bank-bailout/

lostinspace's picture

Thanks guys

Thanks for all you do Turd.

If anyone hasn't posted a love letter to Blythe yet, please do.

http://blythemasters.blogspot.com/2011/08/harvard-business-schools-womens.html#comments

Lots of people were picking dates already taken for the new contest, so I moved ya'll to next available day.

Gramp's picture

Eric O

cool, just found your response. Thanks!

much of what u said makes sense. how many times have we heard old relatives say something like " we had tons of those... _____, wished i had saved them now"

survivalwstyle's picture

mOOn over my haMMies

hat tip on the ham sale nuts. got myself a year suPPly. and there is no limit to how many you can buy online. NO TAX. order over 25 bucks and frEE shiPPing. now sure why i had to pay .86 to ship, but i can aFFord that.

Review & Submit Order

Please review your order. If all the information is correct, click the Submit Order button to place your order.
 
 

 
 
 

Products

Product Size Price Qty Total  
Boneless Cook Ham with Natural Juices Boneless Cook Ham with Natural Juices, 
by Celebrity
12.0oz.

Reg.$4.29

Sale  $2.29 ea.

12    $27.48
You Save:
$24.00
 

Standard Shipping: $0.86

Items arrive 3-7 business days after processing

 

Subtotal:

$27.48

 

Tax:

$0.00

 

Total Shipping Charge:

View shipping details

$0.86

 

Total:

$28.34

 

Total Savings:

$24.00

Gramp's picture

what's the shelf life on the

what's the shelf life on the hams?

survivalwstyle's picture

long live the ham

last one i purchased, a few months back had a date of june 2015. i ate it and liked it. great w/ eGGs in the AM. so i have bEEn waiting for a sale like today. i might go back in there and double up in a few days if we do not buy them out. i think a fuLL mOOn brings out huge demand for pig products.yes

speconomist's picture

Which entry of the blog is

Which entry of the blog is going to remain, this duplicate or the previous one with the same content?

s1lentslayer's picture

I bought a new 1oz gold eagle

I bought a new 1oz gold eagle so expect a dip everyone:)

RuNuts's picture

Excess profits tax on miners, windfall profits tax on Au?

Turk & Embry both mentioned John Brimelow recently..

Resource Clips interviews GATA London speaker John Brimelow

"Kevin Michael Grace of Resource Clips has done a wonderful interview with gold market analyst John Brimelow, who spoke at GATA's Gold Rush 2011 conference in London last weekend. Brimelow discusses the observations offered at the conference by geopolitical analyst James G. Rickards and reviews ways of buying gold."Rickards:

http://resourceclips.com/2011/08/12/brimelow-on-how-to-buy-gold/

Excess profits tax on miners, windfall profits tax on Au?
I'm beginning to believe Empire would as soon burn it all to the ground before loosing their position of power. Repeatedly... they have demonstrated a clear disdain for our rights, lives & future. Wars, suppression of freedom, economic collapse... This is a beast with no conscience, no moral absolutes, who's only goal is to further feed it's self on humanity.. eating our children if you will. They will ride it into the ground on our backs if allowed.

 

DeltaCharlie's picture

Turd da man

I always anticipate your posts, and as always, they're informative and reasoned!  You da man, Turd!

Tyler's picture

survivalwstyle

are you writing in code

vivekmert5's picture

Correction in GOLD!!

GOLD TO TRADE IN US$1560-1640 THEN IN SEPT. TO LEAD TO US$ 2000-2350.

THEN A LIQUIDATION IN GOLD FOR BRIEF CORRECTION TO US$1420. THEN IN RANGE TILL BOTTOM OR BASE BUILDING IS DONE FOR HIGHER PRICE.

FINAL RUN IS WAY LONGER TILL 2020 YEAR WHERE MAJOR HIGH COMES BUT BE CARE FULL FOR YEAR 2016-2017 AS 8 YEAR CYCLE IN GOLD FOR MAJOR LOW LIKE 2008 BIGGEST BUYING OPPORTUNITY.

SOME EXITING THINGS NEED TO  SEE IN GOLD FOR FUTURE.

goldvsDJ.gif

goldmonthly.gif

goldhav1.gif

goldhav2.gif

goldvshui.gif

dowgold.gif

m0.gif

debt.gif

foreigndebt.gif

rgold.gif

Gold Monthly Price Chart and 2000 dollar price target

December Gold Futures price Chart

Schermafbeelding+200-u08-10+om+18.57.17.
 
RuNuts's picture

Re: Soros to Germany: Bail out the EuroZone

es ist eine Falle!

Haole's picture

The whole idea of

The whole idea of confiscation through heavy-handed taxation, holders of metal being branded terrorists, maybe even nationalization of miners, etc. has me just a little freaked-out.  The EE can change the rules anytime they want and likely will going forward.  As if we don't have enough to worry about, we get to speculate as to whether or not we're going to be ruined to a degree anyway by the pirates who still control our "civilization".  If Rickards is saying shit like this then you know it's on their minds as a plausible option to screw the minority of little people who should be rewarded, not vilified, blamed and preyed upon ultimately.

waxybilldupp's picture

A most excellent rant ...

on the economy.  The Munk tells it like it is.   Just says what we've all been thinking.

The Vet's picture

COT figures?

Can anyone explain why the COT figures are always almost a week old before they are made public.  I cannot believe that the big institutional shorts work on week old figure, so why should we?   I assume that by hiding the figures it allows them to move their positions, mount raids and generally stuff the market to their advantage without disclosure.  Why must we accept this obvious insider trading advantage given the big shorts in this day and age?  They should be available to everyone, real time if the COMEX market was fair and transparent.

The same comment applies to short sales of stocks.  I've nothing against legal short selling, but why are the figures only reported monthly when they are obviously collated in real time and hidden from the public when the insiders have continuously updated information.  The public has the right to know which sales are made short and which are not.  It is required information on every transaction yet it is not reported.

johnboatcat's picture

Walgreens ham shipping

The fine print says free shipping over $25.00 ON THE FIRST 10 POUNDS (up to 10 pounds).

cpnscarlet's picture

Confiscation - A Limit

The whole idea of confiscation simply goes to the heart of the matter - Absolute Tyranny. We all need to decide where we will "draw the line". PM Confiscation seems like a good place for the common man. Direct confiscation of personal property is only a philosophical debate away from "killing you a little". They want Gold? Maybe you should give them another metal instead.

Eric Original's picture

Hey johnboatcat!!

Long time no see!!  How was the summer on the water?  How is the ballerina?

Tesla's picture

Rick Perry - Bankers Answer To Ron Paul

The last president that wanted to end the FED was assassinated (JFK) 

http://www.infowars.com/

Eric Original's picture

Ham exp date

Survivalwstyle has it right.  I just ventured down to my hidden bacon bunker of doom and checked some of my stock.  All my hams are dated 2015.

ewc58's picture

Silver....ham.....silver.....ham.....silver.....ham....

Oh crap! I was gonna go with ham..... UNTIL Turd just confirmed the Ag CoT!!! Our patience and rigorous discipline will soon pay huge divvies.

I truth I went with ham, already completed my order for 12 Celebs! Funny, 2 others above went with the dirty dozen too... $28.40 for 12, delivered. Try beating that for 9 lbs of long shelf life, high quality protein.

Really great job Eric O.

question's picture

For All You Pork Fans

Pig Meat is What I Crave!

Not me , I'm a vegetarian but still appreciate good tunes.

By the way, efoodsdirect.com has great tasting survival foods; dehydrated instead of freeze dried, much better IMHO. Weigh more so not as packable, 15-25 year shelf life, and veg. protein.

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