An Amazing CoT and BPR for Gold

Released just this afternoon, the July Bank Participation Report and the latest Commitment of Traders Report are so interesting that I felt they justified this new post.

So, let's dive right in. I'm not going to spend much time talking about silver because the data is somewhat skewed this week by the expiration of the July13 contract. The Large Specs added 3800 net long and the Commercials added 3700 net short, all due to expiration and rollovers and now we see why silver outperformed gold by such a wide margin last week.

The reports for gold, on the other hand, are astonishing. Let's start with the CoT. For the reporting week, price fell by $32 while total OI rose by 19,752 contracts. Check out these internals:

Large Specs dumped another 6,200 longs and added 7,200 additional shorts. This brings their net position down to just 20,700 contracts and drops their total net long ratio down to a preposterously low 1.15:1. Again, for perspective, shortly after QE∞ was announced last fall, the gold Large Specs were net long over 210,000 contracts. This means that, in the time since, they've been coerced into dropping their long exposure by over 90%.

On the all-important flip side, The Gold Cartel added another 21,427 new longs last week through the Tuesday cutoff. Because they also added 8,995 new shorts, their net short position only declined by over 12,000 contracts. However...and here comes the amazing part...their new net short position is just 22,776 contracts, roughly 70 metric tonnes of paper gold, and their updated net short ratio is also preposterously low at 1.12:1.

Remember, this entire "event" from the announcement of QE∞ last fall to today, has been staged in order to give The Bullion Banks the time and the ability to cover their massive paper short position. When QE∞ was announced in September of last year, the total Cartel net short position was 737 metric tonnes of paper gold. As of last Tuesday, they are now net short just 70 metric tonnes. That's an incredible and amazing drop of over 90%.

Now get this, the CoT survey was taken last Tuesday. On Wednesday and Friday of last week, the total dollar move in gold was down another $32. Over those two days, the total open interest n gold rose by 18,561 contracts. It recent form follows, then it is safe to conclude that the vast majority of this new OI was contract initiation on the short side by the Large Specs. If that's the case, then we headed into last weekend with a total Gold Cartel net short position as low as 5,000 contracts. TOTAL!! And now you see why I find this so incredible and amazing.

Next let's consider this month's Bank Participation Report. This aggregated report gives us a once-a-month look at the gross positions of those traders classified as banks, both U.S. and non-U.S. Now check this out...let's start with the report from last October so that you can see from another perspective just how steep the changes have been in the nine months since.

                                            GROSS LONG      GROSS SHORT

U.S. Banks                                40,625                  146,809

Non U.S. Banks                       34,881                  113,445

TOTAL                                        75,506                   248,254

And now here are the numbers from last month (June). Note that the banks had moved from net short position of 172,748 to a small net long position of 4,582. This got everyone's attention and was well summarized here: http://jessescrossroadscafe.blogspot.com/2013/06/cftc-gold-and-silver-bank-participation.html

                                             GROSS LONG      GROSS SHORT

U.S. Banks                                56,751                   27,129

Non U.S. Banks                       24,035                   49,075

TOTAL                                        80,786                  76,204

Well, we've all been waiting with baited breath for the July report and it just came in a few minutes ago. Would the banks continue to cover on these falling prices or were they adding to the downside momentum? We got our answer:

                                             GROSS LONG      GROSS SHORT

U.S. Banks                                69,565                   24,939

Non U.S. Banks                       34,904                   58,565

TOTAL                                       104,560                 83,859

The total net long position grew by over 16,000 contracts to an astounding 20,701. But drill a little deeper...The U.S. banks actually added net longs of 15,000! The only thing holding the overall net position in check was the 9,500 new shorts put on by non U.S. banks (HSBC? Scotia? Barclays? UBS?) Do you think that The Fed warns, plans and advises the non-U.S. banks as clearly and succinctly as they do the U.S. banks??  The Fed IS the U.S. Banks. If Barclays or UBS is too stupid to see what's going on and they are actually adding shorts at these prices, well Hells Bells, go right ahead! Their selling simply allows the U.S. Banks to cover even more!

Look, I know these past nine months have been brutal and we've all suffered through the almost-daily pain of continued losses. But this is almost over! Yes, prices may continue lower, stopping and turning who knows where. However, I am 100% confident in my analysis of The Big Picture here. The major, too-big-to-fail, Fed-Primary-Dealer and Bullion Banks have now fully gotten themselves out from under what had been an extraordinarily wrong-footed net short position of over 146,000 contracts last autumn. They are now net long nearly 45,000 contracts! (And certainly more than that after last Wednesday and Friday.) That flip of  191,000 contracts took place while price declined by 30% from $1800 to $1250 and represents a change of position equaling over 595 metric tonnes.

Please, I beg you, remain patient and continue to stack physical metal. You will soon be rewarded with a rally that will surprise even the most ardent of bulls.

TF

http://news.goldseek.com/COT/1373312054.php

http://www.cftc.gov/dea/bank/DeaJuly13f.htm

141 Comments

thurd aye's picture

just to show Im still alive

.f...f...first? sweet.

Im more concerned about Ed Snowden than gold or silver.We will win,but will he?

The Watchman's picture

GLD Continues to be DRAINED-15.03 Tonnes GONE

Tonnes946.96

Ounces30,445,700.80

Value US$37,586,383,133.86

TheSlav's picture

Cool

about time

49Pan's picture

Fourth?

Again, thanks to the Turd....

tosser's picture

silver bitches!

er......no wait!

DirkDirkler's picture

tosser

Haven't heard that phrase for a looong time. Hope I'll hear it again one day, as often as I did during 2011.

Turd Ferguson's picture

And the GLD dopped another 15 mts today

MODERATOR

In a delayed "response" to Friday's selloff, GLD fell 15.03 mts today to 946.96. That's another 483,225 troy ounces or another 6+ of these:

ancientmoney's picture

Wow--GLD drops 15 tons in a single trading day . . .

Wonder who snarfed up that stack of phyzz?

chinaussiedoll's picture

Wow, waking up in Australia to top 10!

Keep stacking - everything! My house insurance - up 50% . car registration 15% - supply charges on all energy also up.

Turd Ferguson's picture

Yes, and now down 29.85%

MODERATOR

YTD. Over 400 metric tonnes from 1349.92 to 946.96.

More than half of this extraction having occurred since the deliberate smash through $1525 on 4/12-4/15. On 4/12/13, the GLD allegedly held in "inventory" 1,158.56 metric tonnes.

Howard Roark's picture

Great News Turd

But let me ask ( in my skeptic overview of TA in this environment): what if the EE is just trying to fine tune another great and long manipulation? Just like these past nine months? They may try to reverse going long now, but then try shorting all over again. What´s to stop them from doing it?

I ask this with the sole purpose to highlight that the reason to hold true monies is beyond the considerations of this big rig in the markets.

Salut to all, HR

ancientmoney's picture

@HowardRoark . . .

"what if the EE is just trying to fine tune another great and long manipulation?"
--------------------------------------------------------
This time, the manipulation will have to be to the upside for quite some time . . .

The game has entirely changed over the last 9-12 mos. I think the Fed, when they announced QE-infinity, told the bankers to use this opportunity to get out of
PM-Shortsville.

Motley Fool's picture

...and

SLV adds 90.04 tonnes for total inventory at 10,051.46

TheSlav's picture

BTW Turd, belated kudos on

BTW Turd, belated kudos on this observation from the BLSBS post ( amazingly 1st I've seen or heard point this out ) :

Speaking of "narrative", while I've been on vacation I've had one thought that keeps creeping back into my mind. It's this notion that gold is going down because sometime soon The Fed is going to begin to "taper" their $85B/month in quantitative easing. OK, fine. But how does that explain the fact that gold has been going down since October? QE∞ was announced last September and fully realized in December yet gold broke from $1800 in early October and has rarely seen an uptick since.

I've lost count how many times I have screamed this ( or a derivative with expletives ) at the "boob" tube when one of the experts posited that GLD/SLV were "tanking on the taper talk".  Perhaps a small initial run-up, then straight into the ground. 

sierra skier's picture

Thanks for the great outlook

It is high time that PMs took a healthy turn around. We have truly paid the price and had our patience tried through this period of the commercials reducing their short holdings. The reductions in inventory are incredible as well.

When the manipulations in all of the markets are so substantial it is difficult to use any of the old indicators that used to be reliable in guessing market direction. I myself have given up trying to figure out what is going on and just watch with amazement as the markets are led around by those in charge.

All of my dry powder was used to buy silver in the $30 range so I have been on the sidelines since, however we may have an opportunity in the next couple of months to get back in for more. Hopefully getting in for as great value and in a rising market.

Howard Roark's picture

@ancientmoney

Yes I guess we agree. But that is my point exactly: for the time being (next months/years) it may be a manipulation to the upside. But when we´ll be free of this kind of dissonance? And why should we suffer from that anxiety?

As some interviews I´ve been reading/listening put it: when will the price discovery mechanism set in?

Other than this intellectual curiosity, I know why I own metals. To me they are reflections of the truth, in economy and life.

Salut,

HR

Bollocks's picture

F-F-F-F-F-F-F-F-F-F-F-F-F-F-F-F-F-F-F

Andy Murray deserves knighthood after Wimbledon - David Cameron

Prime Minister David Cameron says Andy Murray deserves a knighthood after becoming the first Briton to win the Wimbledon men's singles since 1936.

Murray won the title with a 6-4 7-5 6-4 triumph against world number one Novak Djokovic on Sunday.

"I can't think of anyone who deserves one more," said Mr Cameron, who watched the match from the Royal Box.

http://www.bbc.co.uk/sport/0/tennis/23225645

---------

"I can't think of anyone who deserves one more"

OK, OK, I'll leave off the WimbleBALLS now. Couldn't help myself.

 

Turd Ferguson's picture

Thanks to Bill and Chris

MODERATOR
Pellet's picture

Jim Sinclair

Did anyone attend his Q&A session today and can provide a brief summary?  It just ended about 45 minutes ago.  Thank in advance for anyone who chimes in.

So It Goes's picture

US Mint update

http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion

The US Mint just updated their monthly totals of sales for 2013

Sales of Au  oz/coins

July 16,500
16,500
2,000
4,000
1,000
4,000
1,500
15,000
21,000
39,500
Total 561,000
561,000
23,500
47,000
22,500
90,000
43,000
430,000
650,000
1,128,000

Sales of ASEs     All 1 oz

July 1,648,000
1,648,000
Total 26,691,500
26,691,500

Well, I think we are still on line for a record - if the price were to increase, given that Au and Ag are Giffen goods:

https://www.google.com/search?source=ig&rlz=1G1GGLQ_ENUS383&q=giffen+good&oq=giff&gs_l=igoogle.1.1.0l6j0i10l2j0l2.1118.8291.0.11882.10.7.3.0.0.0.104.577.6j1.7.0...0.0...1ac.1.12.igoogle.s19eHCeYN7g

I suspect that as the price now goes higher, the demand will become overwhelming.  But then again, WTFDIK?

EDIT:  I went back and looked:

The totals of the past record of sales - the year 2011 - is indeed being soundly trumped.  Au - 2011 = 640.5   FOR THE WHOLE MONTH OF JULY

Au for only the first (week or two - depending on how the Mint counts) for 2013 is already at 650 K.

Same for Ag - 2011 total through the ENTIRE month of July - 24.64 M

Ag - 2013 - total for only the first week(s) of July - 26.69 M

I expect that ASE sales will be updated at least once more in July and we are already 8.3% ahead of sales at a minimum from the previous record year.

So it goes.

Pellet's picture

Nice shout out from the GATA folks

Recognition from guys like that brings some nice publicity to the blog and should bring more viewers and page hits.

russwinter's picture

Bullion Banksters Positioned to Slaughter Speculators

Reports on commitment of traders and bullion banks’ participation reveal that the sistema is strongly positioned to take out slingers (speculators).

more- http://winteractionables.com/?p=4267

Silver_investor's picture

Soon?

What do you mean by "soon"? A month? Six months? A year?

Watcher's picture

Good work TF

The U.S. banks now long puts them on our side. I think I liked them better when they were on the other side.

Stock_Canines's picture

Jesse

Jesse highlights Turd's work as well, "Mr. TFerguson has some interesting comments to make tonight on the Bank Participation Report and the 'big short' held by the Banks."

Pining 4 the Fjords's picture

@ silver_investor

In geologic time it will appear to be nearly instantaneous.

Silver_investor's picture

In that case

Some of us may not be around. wink

Pining 4 the Fjords's picture

Around here...

Those who get shaken out of their position after a mere millennium or two are considered "weak hands".  Of course the sun will explode in another billion years or so, so in the long run it won't matter much- TEOTWAWKI indeed!

Missiondweller's picture

@Roark

Conceivably that game could go on forever except for one thing: REAL gold is disappearing from the system as it moves East.

My first thesis was about gold price bifurcation between paper and physical. That has begun.

The next big thesis is on the growing shortages that will begin to become more obvious to everyone, not just those who buy by the ton. I believe a growing shortage, combined with higher prices, will set the stage for the final hyperbolic blow off top within a few year, after which, a new gold trading and monetary system will emerge, likely in Shanghai,China.

For that reason I have filed a patent on a new gold payment system that will bridge the existing system (through debit cards) with the emerging gold payment system (outside the existing banking system). Imagine paying with gold based account that converts just enough gold to local currency to complete a transaction, but leaving the remaining balance in gold units. In some ways its a cross between the GoldMoney patent payment system with what Peter Schiff has claimed to have done outside the US. The mechanics of the payment system are entirely new however and will be usable WITHIN the US.

meegoreng1's picture

Turd says....

But this is almost over! 

Turk says the bottom is in. Santa says we are going up from here.

Oh oh...the EE loves nothing more than making hat eating fools start eating their shoes.

Watch out guys, here comes another smash in PMs!

Turd, whatever happened to your negative posts. I can't take anymore of these "bottom is here" posts! wink

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