Historic Comex Positioning and Other Oddities

In our endless effort to educate investors and, at the same time, draw attention to the unfairness of the fractional reserve bullion banking scheme, opportunity sometimes presents itself. In reviewing this post, you may find that this is one of those times.

We've spent countless hours writing about the fraudulent nature of the Comex pricing scheme. We've discussed how The Banks manipulate and control this paper derivative market and, by understanding this one simple fact, we're often able to correctly forecast short-term trend changes in price. This is why there's a TF Metals Report in the first place. As we've stated for over five years: "Turd Ferguson isn't a psychic, a soothsayer or a witch. After all this time, he simply has a decent handle of the precious metals markets".

Most recently, after observing another brutal Cartel Bank price capping effort in October, where The Banks adjusted their NET position by nearly 100,000 gold contracts and 38,000 silver contracts in just four weeks, we issued this public warning through our daily podcast platform. It's a public thread that was posted on October 16. Feel free to listen now, if you'd like: http://www.tfmetalsreport.com/podcast/7211/tfmr-podcast-friday-october-16

Over the next six weeks, we tried to warn subscribers as often as possible as to what was coming. Here are 12 posts in chronological order, all of them made public today (if they weren't already) for your review:

The purpose in listing these it not to gloat or sell subscriptions. What we want you to see is that this short-term stuff is, indeed, predictable...so long as you recognize what the motives are behind the paper trading. The Bullion Banks control these markets and the speculators are their playthings. Spec money piles into long positions and The Banks issue the shorts on the other side. Price is then crashed, inducing Spec liquidation and shorting while The Banks buy to cover their shorts and add longs. Once this cycle is complete, it begins again. Wash, rinse, repeat.

But we wouldn't take the time to write all of this up on a Sunday UNLESS this time looked and felt a bit different. In the article above entitled "The Rats and The Sinking Ship", we laid out a collection of anecdotal data points such as declining Comex vault gold and the apparent "run" on the vaults of Scotia Mocatta (http://www.tfmetalsreport.com/blog/7287/rats-and-sinking-ship).

To that list, let's add these points:

  • It simply cannot be coincidence that, with Bank leverage at unprecedented levels on the Comex, reaching 325:1 registered to open interest on Thursday, that Dec15 gold deliveries are nearly non-existent. Check this out:
    In Dec15 silver, where the leverage ratio is near historical norms at 19:1, there have been 3,513 posted "deliveries" this month while Dec15 open interest has fallen from 4,078 last Friday to Thursday's 480.
    In Dec15 gold, however, where the leverage ratio is the aforementioned 325:1, there have been a whopping 91 posted deliveries while open interest has fallen from 7,849 to 2,993.
  • Reports out of London suggest that GOFO rates, while no longer published by the LBMA, have fallen back to historically negative levels. The rates for 1-month, 2-month and 3-month GOFO were reported to be near record lows on Thursday, levels only seen prior for a few days in late November of 2014.
  • GLD "inventory" now more than cut in half and down over 700 metric tonnes from the highs in 2012.
  • Perhaps most importantly, the data found in Friday's CFTC-generated Commitment of Traders report: http://news.goldseek.com/COT/1449261204.php
  • Also on Friday, the CFTC released its monthly Bank Participation Report, showing for the first time in memory, that the summary position of the 20 largest non-U.S. Banks was NET LONG 2,496 Comex gold contracts: http://www.cftc.gov/MarketReports/BankParticipationReports/deadec15f

Let's focus, though, on Friday's CoT report as it was truly historic and unprecedented. Why? Not only did it contain evidence of the smallest Large Spec NET long position in history. It also showed the smallest gold Commercial NET short position in memory at just 2,911 contracts.

Keep in mind that this data comes from the weekly CoT survey taken at the Comex close every Tuesday. So, as of last Tuesday, the Commercials in gold held just 2,911 contracts NET short. This is far and away the lowest NET short position for them we've ever recorded. This means that the current CoT structure is more constructive than:

  • Late June 2013, when the Commercial NET short position fell to a then-record NET short position of 22,000 contracts. Over the next two months, price rallied from $1180 to $1430.
  • Late November 2014, when the Commercial NET short position fell to a NET short position of 68,000 contracts. Over the next two months, price rallied from $1140 to $1310.
  • Early August 2015, when the Commercial NET short position fell to a new record NET short position of 14,800 contracts. Over the next two months, price rallied from $1085 to $1190.

But we need to take this one step further. On Wednesday of last week, the day after this most recent CoT survey and therefore not included in this report, the price of gold fell sharply and finished the day down nearly $10. On that day, the total Comex open interest was reported to have grown by nearly 8,000 contracts. Years of experience lead us to conclude that the selloff on Wednesday was largely a Spec shorting affair and the rise in total open interest was due to the opening of brand new short contracts, with the Commercials (Banks) taking the other (long) side. If this is correct, then there can be no doubt that Wednesday's action further decreased both the NET long position of the Large Specs AND the NET short position of the gold Commercials. With the total open interest rising by 7,709 contracts that day, we therefore draw the following conclusion:

  • At the close last Wednesday evening, December 2, 2015, the Gold Commercials were NET LONG gold futures for perhaps the first time since gold futures trading began on the Comex in December of 1974.

Think about that for a minute.

Now, think about that as it relates to the next price rally, given what we laid out above concerning the last three declines in the gold Commercial NET short position.

Now, think about that in terms of the history of the Gold Commercial positioning, a history replete with examples of a short position in excess of 200,000 contracts, even approaching 250,000 contracts in the autumn of 2012 right before the initiation of QE3 and the counter-intuitive paper price smash that continues to this day. Compare the latest CoT to those extremes of September 2012. At that time, gold was expected to rally as the massive $1T+ QE3 program was announced. Instead, a decline began that has smashed price from $1800 to this week's lows below $1050. And, over that same time period, the gold Commercial NET short position has been completely wiped out and covered, as we stated likely extending into NET LONG for perhaps the first time in history.

DATE       PRICE   GOLD COMM GROSS SHORT       GOLD COMM GROSS LONG        GOLD COMM NET

2/28/12     $1770                         390,412                                                          145,134                                         (245,278)

9/11/12      $1750                         380,239                                                         142,946                                         (237,293)

12/1/15      $1065                         158,465                                                          155,554                                            (2,911)

Now, think about the timing of all of this. The gold Commercials, a group made up in large part by the trading desks of the major Bullion Banks, have just moved to a NET position that is long gold futures contracts for what might be the first time.

Now, consider again all of the assorted, supposedly "anecdotal" data points we've laid out over the past few months.

Now, put all of this together in your head. Do you reach the conclusion that maybe, just maybe, the paper price of gold is set to rally in the days ahead rather than plunge...as all of the supposed "experts" in the financial media would have you believe?

We'll take it one step further...

Perhaps...maybe, just maybe, we are finally getting close to the end. The stresses within the fractional reserve bullion banking scheme are evident for all to see and they come at a time when the Comex market-making Banks and commercials have positioned themselves either long or neutral for the first time ever.

But even if this isn't "the end"...and The Banks are able to hold things together a bit longer...here at TFMR, there can be no doubt that the next move in the price of gold is UP, not down, as the next Spec wash-and-rinse cycle begins. You can use this information to either position yourself to make some fiat profits or simply add to your existing stack of physical metal. It's up to you. Either way, be ready. The next few months and, quite frankly ALL of 2016, are going to be interesting, to say the least.

TF

126 Comments

Marchas45's picture

Fucken Hey

I'm First?

Oop's sorry for the language, got carried away. Lol Keep Stacking

LostMind's picture

Second.

Been a long couple of weeks. 

Thanks Craig for such a great site and experience. Greatly appreciate your professionalism and market analysis. 

Great to see Ss121 back too. So many great posters who add so much too this site. Best site I subscribe to and I subscribe to 15 or more... 

Again, thanks Craig for all you do. 

silver66's picture

Thurd

Marchas45 I am unsure what you are appologizing for

Silver66

Stack till it hurts

infometron's picture

Fucken Fourth!

Thanks Marchas ;^)

On what appears to be a cardinalis turdus magnum opus, no less!

lakedweller2's picture

@TF

Thanks for working on Sunday 

procog's picture

Wow! What an unexpected pleasure

To get this very detailed and timely information.

What a terrific website Mr Ferguson. Thank you.

Nice to be in the "Top Ten."

AlienEyes's picture

infometron

"cardinalis turdus magnum opus"

Red turd great work ?

My Latin ain't what it once was.  sad

Bollocks's picture

Cripes Turd

Amazing work there. Glad it's not me trying to keep up with all of what's going on without TFMR.

"Turd Ferguson isn't a psychic, a soothsayer or a witch"

Ok ... but you are a witch. smiley

Steve Silver's picture

one big point to add to Turds list

Kyrptonite for the bankster gold bashing game is a shrinking US economy. Manufacturing is already in recession. Weak commodity prices are a sign of a weak world economy. Weak commodities also cause weakness in commodity based economies which reduces demand for advanced economy products. Weak commodities also results in loan defaults.   

The Christmas numbers are weak so far. Auto deals are getting extreme 20% cash back or leases for well under $200 per month. Terrorism is also a growing impediment to economic activity.

My number one reason for a weak economy in 2016 is Obama's karma. All his policies are massively destructive to the proper functioning of an economy. The only thing that has saved him so far is a big party at the fed. Even the most ardent leftist is going to hate Obama by the time the election rolls around. 

Coming in 2016  an orgy of money printing and a soaring gold price.  

Boatboy's picture

Fabulous Update

Thank You Very Much Turd for this long awaited info and Congratulations on your Ascension to the Big Show!

Ensues's picture

China SDR Coincidence?

So as I sit here and ponder what this means I think the timing is very interesting.  China JUST got approved by the IMF for inclusion into the SDR basket.  I know that China's gold accumulation was a big part of earning a spot in the basket.  It just seems such odd timing that the IMF made the China announcement and literally a day or two later the commercials go long.  It will be interesting to watch China PBOC gold demand in the next number of months.

Markedtofuture's picture

Real Estate has Peaked

Great work Turd.   A gold paper/ physical ratio of 325:1  would have made Houdini take notice. 

Martin Armstrong posted the peak in real estate is in.

Posted on December 6, 2015 by Martin Armstrong

Luxury Home

The US real estate market has turned for the top end has peaked. Luxury homes for the top 5% are now off by 2%. In my personal search in Florida, I looked around for the past year. Some of the high-end homes they showed me on the beach were still on the market. One that I looked at which just came on the market at $4.5 million has cost $7.5 million to build. It was a divorce. This end of the market the agent told me had been selling in cash deals, rarely a mortgage.

CNBC has reported that Redfin real estate company tracking the top 5% of  the more than 600 U.S. markets fell an average 2.2% in the third quarter compared to the same period last year. When the rich stop buying, the rest follows.

continued...http://www.armstrongeconomics.com/archives/date/2015/12

Mr. Fix's picture

Wish I could be so optimistic....

At this point, and for quite some time now, anything coming out of the COMEX is pure propaganda.

It is specifically designed to point you in exactly the wrong direction.

My  long-standing prediction on the price of the metals is unfazed, "There will be no substantial increase in the price of precious metals until the system collapses."

Only old-timers know I've been saying that for four years now.

It simply will not be allowed.

The current power structure must collapse before gold and silver will be set free.

We are undoubtedly working at a very steady, and in fact, accelerating rate of collapse, one that has been preplanned for a very long time.

The necessities of life will explode in value long before silver and gold do. Make sure you have what you need.

Above all, have a nice day. cheeky

I'm number 13, how freaking appropriate! devil

Angry Chef's picture

Message To My Southern Brother's

Tonight President "O" will come out and tell you that you need to turn in your gun's. I want you to know, that from my perspective he is a liar and a traitor to you and you're once great Country. Don't believe him. And remember all of the tyrants before him that confiscated it's citizens gun's. Stalin, Hitler, and Pol Pot come to mind... What good is your Gold & Silver going to be if you can't live FREE ? Muslims are not your problem. Except for the one in the White House.

Marchas45's picture

Just Came Across This

Has anyone seen this BBC program Towards Tomorrow a Utopia? Really has me intrigued, guess I was asleep back then or just didn't care and I'm just waking up maybe a little to late. Keep Stacking

http://blog.go-here.nl/8607

tyberious's picture

Central Banks Are In The

Central Banks Are In The Harvest Phase Of The Economic Collapse:John Titus

Sherpa Bill's picture

Why Long Now?

Turd this is a wonderful post with a great deal of supporting information.  I guess I am missing the "why" part of the criminal comex bankers going long now.  Could it be the Yuan Being included in The IMF SDR basket as Ensues ponders?  The sheer size of the China gold position?  It is hard for me to believe that the that comex is running out of physical for delivery and fears a failure to deliver moment.  Perhaps it has something to do with the Feds Dec. hike.  Maybe it really is more than just jawbone his time.  Would it benefit the FED to have gold rise (slowly) to keep the dollar from rising too quickly or too high after a hike?  Would gold prices be rising to provide an even better safe haven for the wealth of the 1% leaving the stock market as it goes bear?   They do like those profits you know.

Congratulations Turd on your new gig with Eric Sprott.  Perhaps you could pick his brain a bit about this issue during an upcoming interview.  I have subscribed here for many months now and have learned a great deal.  Thanks Turd!

P.S. I hope that you are getting more than ten bucks a month from Sprott ; )

lakedweller2's picture

@mr fix

I worry about that same scenario.

lakedweller2's picture

@angry chef

Just about fear.  Guns another day.

Bollocks's picture

Mr Fix

"The necessities of life will explode in value long before silver and gold do"

I don't agree. That may appear not too long after. There will be a period of time where those who have their wealth stored in banks will look for an exit as inflation really grips and then turns to hyper-inflation.

Anything that looks like a good store of value - anything other than the currency we use now - will be bought. Gold will very likely appear at the top of the list for most - to protect accumulated wealth stored in the banks, in another form.

I agree that if things collapse catastrophically then the necessities of life - food, water, shelter, whatever else, will be most valuable. But only after a flight to another medium as a store of wealth.

Even then, there will still be the need for a currency, real money, to use for the exchange for the necessities of life. Bartering won't be attractive (not that you mentioned bartering, but what would be used as a means of exchange - something must).

 

Dyna mo hum's picture

ANGRY CHEF

WELL  SAID!yes

Dr Jerome's picture

Great explanation of the feeling deep in my guts, Turd!

I sense a movement coming--upward movement.
Lately, articles and discussion in the vault has provided me with enough well-timed and accurate analysis to make some correct trading decisions in my employer-funded retirement account. It took a while, and I had to flush some of my prior ideas about trading, but Turd's analysis and predictions more than pay for the cost of membership. Not a trading service... but... if you read between the lines and discuss strategies with others in the comments section, you can get on the right side of these big moves.

mfields111's picture

The comex is going to end now

Think how rapidly this decline in price has been implemented. At no time ever have we seen such a rapid smash down.  Why would the market makers do this if not to scare out as many longs as possible for the ultimate capitulation.  Now lets look at the upcoming  rate hike proposal.  Why is this such a big deal, with the Fed banging the drums about it so loud its deafening.  Why the massive volatility in stocks which is usually a forerunner of a market catastrophe. What about the calamity is junk bond markets, the massive dumping of US treasuries by China, Russia and others recently and the clear slide in the oil markets shooting to $30/barrel with the Saudis indicating they will not lower output.   Here is the most logical conclusion to me: The fed is preparing to raise interest rates in the face of a rapidly faltering global economy which will induce massive precious metals buying resulting in a force majeure at the comex which could not tolerate that and a stock market crash.  That would justify a massive further injection of printed money as the Fed justifies joining all the other global money printers.  That will induce a grand hyperinflationary period to last at least a year or two into a final collapse.   

lund175's picture

Good article on false flags

This is just the tip of the ice berg.

Proven False-Flags

  • Iran-Contra
  • Watergate
  • Operation Gladio
  • Operation Northwoods
  • Gulf of Tonkin
  • Pearl Harbor

https://truthshock.wordpress.com/2015/12/02/anatomy-of-false-flag-events/

s1lverbullet's picture

Pearl Harbor a false flag

LOL WOW. JUST WOW.

How is Mars at this time of the year Lund? 

These boards get more nutty with each passing day I swear. 

I LMAO'd hard at that one, thanks for that.

Just another example of why I can't take the analysis of many posters on these boards seriously. 

Joseph Warren's picture

Politician's Speeches

perhaps the point is reached when you no longer care what politicians say in speeches. You know most of the time they lie for a system of fraud, anyway.

You know what is right and wrong. You no longer go begging to some false 'authority' for what is already yours - - including God given natural rights. You know that you have the right to live your life as you please, as long as you do not harm others or interfere with their right to do the same. Those who interfere with these rights are the wrong doers.

Perhaps you reach the point where you recognize our time here is very short. And, no one gets out of this place alive. And, we choose to live that brief flash of time as free men, rather than as slaves.  The founders of America understood this. But over a relatively short span of time, it was forgotten.

Perhaps we'll remember again.

Turd Ferguson's picture

I'm with you on most of this...

MODERATOR

However, there is quite a bit of historical evidence that alleges Roosevelt and other top brass had a pretty good idea that the Japs were going to be attacking and that...not so much that they allowed it....they didn't do much to keep it from happening, either.

FDR et al "knew" that US involvement was going to be necessary at some point but the country was deeply divided, just as it was prior to the Lusitania sinking. However, almost all of the "not our problem" and "let's stay out of it" isolationist stuff went out the window at 7:55 Hawaii time that morning.

On one "side", there's this: http://www.independent.org/newsroom/article.asp?id=408

On the other, there's this: http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8932197/Pearl-Harbour-memo-shows-US-warned-of-Japanese-attack.html

tyberious's picture

Government Sponsored Terror

Government Sponsored Terror [& Other Outrages] -- BrotherJohnF

LMAO " Stop all active shooter drills, there seems to be a 100% correlation"!

tyberious's picture

False Flag Evidence

In the following instances, officials in the government which carried out the attack (or seriously proposed an attack) admit to it, either orally, in writing, or through photographs or videos:

Read more: 42 FALSE-FLAG ATTACKS OFFICIALY ADMITTED TO | WHAT REALLY HAPPENED http://whatreallyhappened.com/WRHARTICLES/42falseflags.php#ixzz3tb1iPp00

s1lverbullet's picture

@ Turd

I agree with everything you just said.  FDR knew they would attack because the Japs had no domestic oil fields.  They realized they needed to attack the Philippines to get access to oil after the US issued the embargo on oil.  We knew it was coming but.....

To say that Pearl Harbor was set up by us in secret is insane.  The same posters that believe this also think that literally every single attack since WW2 has been a false flag.

I'm sure they could also come up with a conspiracy on why the sun rises every morning. 

I'm just tired of the non stop BS.  Them posting stuff like that on a public thread only drives 99% of potential subscribers away from this site.  

Syndicate contentComments for "Historic Comex Positioning and Other Oddities"