A Look At The Latest CoT

Sun, Aug 14, 2011 - 10:55am

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:


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

Gold COT Report - Futures
Large Speculators
Change from Prior Reporting Period
Small Speculators
Open Interest
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.


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
Small Speculators
Open Interest

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.


​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

About the Author

turd [at] tfmetalsreport [dot] com ()


Dr Durden
Aug 14, 2011 - 11:01am



Aug 14, 2011 - 11:05am

nope you missed the initial

nope you missed the initial double post dr durden

Vernon Wormer
Aug 14, 2011 - 11:05am

Great work TF. Keep it up.

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

Aug 14, 2011 - 11:13am

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 https://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.


Aug 14, 2011 - 11:24am

Japan facing flak for hiding

Japan facing flak for hiding Fukushima radiation path

By ANI | ANI – Tue, Aug 9, 2011

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.

Aug 14, 2011 - 11:25am

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.


Aug 14, 2011 - 11:31am

Thanks guys

Thanks for all you do Turd.

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


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

Aug 14, 2011 - 11:33am

@Eric Original Re: HAM ALERT!!


Any idea if the 3 limit applies online?

Edit: order took online for 12 @ $30

Aug 14, 2011 - 11:38am

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"

Aug 14, 2011 - 11:41am

what's the shelf life on the

what's the shelf life on the hams?

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Forum Discussion

by Solsson, 8 hours 12 min ago
by Pete, 12 hours 5 min ago
by SteveW, 12 hours 48 min ago
by Phoenix79, Oct 17, 2019 - 6:28pm