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 ()


Aug 14, 2011 - 1:00pm

Rick Perry is a Globalist, bought and paid for banker EVIL!!!

Learn the truth about this guy - he scares the crap out of you!

Video unavailable
Aug 14, 2011 - 1:03pm


isn't he one of 'em? ? ? booooooooooooooooo

Aug 14, 2011 - 1:04pm


The Brit's and the Yank's still have many things of history in common. The minority of us have often seen the Truth of the good part of our nations but these that spoke the Truth were eliminated. Without a moral revival in our nations, there will be little hope as history has plainly set forth. As the three men listed above were being burned at the stake in the martyrology of England, the words of one of them still rings out in your land.

"Be of good comfort, master Ridley, and play the man; We shall this day light such a candle, by God's Grace, in England, as I trust shall never be put out". Let us believe and hope for men of their Light will begin to speak up in both of our nations. We hope that the Light also will never be put out.

Aug 14, 2011 - 1:04pm

Indiana State Fair :(

for those who were lost and their families.

Aug 14, 2011 - 1:13pm

strange feeling

why do I have that strange feeling that our 2 PM's will open higher tonight ? Maybe it is the 'Things That Make You Go Hmmm….. by Grant Williams' reader that I digested (availabele trough zerohedge)

Aug 14, 2011 - 1:16pm
Aug 14, 2011 - 1:20pm

Great Post @ Jesse's Place...

Hope you can check it out when you get a chance. A calm through the storm.

Aug 14, 2011 - 1:22pm

All went well Eric O!

Good trip. The ballarina has big muscles as I let her pull the anchor every morning. She also caught two bone fish and a nice tarpon on the same day. Hung out a bit at the Flying Monkeys Saloon in Key Worst. Thought of everyone here as those flying monkeys give you a headach just as well as BM's do.

Found lots of uses for pail piggy (canned bacon). Try grilled fresh caught snapper, encrusted in sweet potato, with canned bacon bits on top.

The no-hurricane Emily chased us home a little early. Something about weather coming at you at 15 miles an hour when you are only going 5 miles an hours is unsettling. Already looking ahead to next summer.

Aug 14, 2011 - 1:23pm

Re is Rick Perry Bilderburg = Yes


.2007 video of his denial (funny) wonder why he keeps going back??

Rick Perry Confronted! He Grabs Camera, talks Bilderberg, says NO to new 9/11 Investigation
SilverWealth The Vet
Aug 14, 2011 - 1:28pm


There is an excellent discussion of this on Pailin's Silver board this weekend.

Keep in mind always that the Cartel owns and runs Washington and makes the rules. Period. It starts and ends right there. Expecting parity in the Market is a wild,wild dream.

Eric Original
Aug 14, 2011 - 1:49pm


Glad to hear it. It's always good to have a strong woman on a boat, or anywhere else for that matter!

Aug 14, 2011 - 1:56pm
Aug 14, 2011 - 2:03pm
Warp Speed
Aug 14, 2011 - 2:06pm


The last few weeks maybe even last couple of months, Tulving has had over 800,000 oz of silver on hand. Today down to 600,000 oz. Nice 25% drop in their silver inventory. Maples @ 2.19 over spot, thats nice!!

FogHorn LegHorn Tyler
Aug 14, 2011 - 2:11pm

writing in code

Search sniffers would be able to detect the double caps in imho.

Aug 14, 2011 - 2:26pm
FogHorn LegHorn vivekmert5
Aug 14, 2011 - 2:29pm

Charts @vivekmert5

Those charts are very good imho you might want to give them more exposure by adding the to the charts thread, again there very good. Thank You :)

Aug 14, 2011 - 2:30pm
Aug 14, 2011 - 2:33pm

@vivekmert5 valcambi charts

I dug around...but I cannot figure out what the chart "relative GOLD" is of. The valcambi website doesn't define it. Is it some sort of normalized RSI?

Aug 14, 2011 - 2:37pm


I've come to the conclusion that if the bank is crooked, and the regulator is crooked, the COT report is fiction. It only tells what they want you to see. Watching the silver daily trades, there is little to no reason to sell - ever. The only sellers are the naked shorts. Only God knows the true short position of the bullion banks.

Aug 14, 2011 - 2:39pm

Hey Murphy, something tells me I may have to buy

this miner.... can't quite put my finger on why though....

If they can find gold and silver as well as the other makes semi-auto's, I'll be on 'em like white on rice....

Kimber Resources Inc.

Aug 14, 2011 - 2:48pm

you gotta be kiddin' me

Front page story on CNNFN.com today -

Booming business of fear: Sales of safes soar


MSM disinformation at it's best...message = all PM freaks are...freaks. Sure. Nice picture too, meant to tell avg person "you're not one of them and never will be" based on the quantity of 100 oz silver bars and cost of safe "Brown Safe created this $6,500 custom-designed safe for a customer who needed to protect piles of gold bars, jewelry and cash."

No mention of the fact that one can buy a single ASE online anywhere for $40-$50 no massive safe required. When buying insurance, not everybody needs the $10 million policy.

Aug 14, 2011 - 2:49pm

Bernank discusses

Bernank discusses implementing QE3...

Video unavailable
Aug 14, 2011 - 2:51pm


Thanks for the link, I am now e member of the ham band wagon

Aug 14, 2011 - 2:52pm


Thanks for that Jim Willie interview!

Aug 14, 2011 - 2:56pm


That's a good lookin' miner. If you are looking for a compromise 45 and a concealed carry this is a good looking one as well.


lostinspace murphy
Aug 14, 2011 - 3:02pm


Don't get me wrong, I love Kimbers, but dropping over a grand for a pistol that holds 7-8 rds...

I just got a bi tone XDM 45, holds 13rds, came with factory nites, and drives tacks. $700


Aug 14, 2011 - 3:04pm

Very cool Murph

Kinda looks like a smoother, sleeker Kahr. It got Kimber-fied.

Aug 14, 2011 - 3:05pm

HSR is 17

HAM / AG Ratio as it stands this wEEkend 39.01 / 2.29 = 17.0349345 or 17/1 for those that can round down.

12 pounds of ham cost .86 cents to ship. no tax to my zip. how easy this is...thinking hard about puLLing the triGGer again.

tyler ~~ code word is gOOd. as in aLL gOOd. stockpile awhile. sit back and smile ;o)

murphy lostinspace
Aug 14, 2011 - 3:07pm


Okay I'll just use the Kimber to get to my XDM9 or the shotgun.

Or, if I can't, the second clip should work. If 15 shots doesn't stop the problem I am way over my head.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)