Looking Back and Looking Ahead

Fri, May 3, 2013 - 4:38pm

As we wrap this week and prepare for the next, let's review the charts and the CoT.

First, the Commitment of Traders report. It just came out ten minutes ago and here are my initial thoughts. Keep in mind a couple of things:

  1. For the reporting week, gold was UP $62 and its OI was also higher by 6,000 contracts
  2. Silver was also UP. It rose $1.36 but its OI fell by 15,500 or nearly 10%
  3. The silver OI drop was almost entirely due to May contract expiration and First Notice Day, which happened at the exact same time as the CoT survey, at the Comex close back on Tuesday
  4. After the survey, open interest rebounded on Wednesday and Thursday. Gold was down a 2-day total of $4.50 yet its OI rose by 8,000 contracts and silver 35¢ on an OI rise of 1,400.


Continuing the trend, The Specs sold and The Cartel bought. For the week, the Large Specs dumped 3,900 longs and added 3,300 new shorts and the Small Specs are now NET SHORT by nearly 1,500 contracts after they dumped 2,400 longs while covering 800 shorts. Think about that for a moment....the most out-of-touch, ultimate-outsider group the Small Specs, are now NET SHORT. At $1450. For perspective, near the price peak on 8/16/11 the Small Specs were long 70,510 and short 21,749 for a net long ratio of 3.24:1. As of three days ago, they were long just 37,451 and short 38,940 for a net long ratio of 0.96:1. (As an aside, you should really go back and look at that entire CoT report from Harvey's archives. Marvel at the difference in positioning between then and now. https://harveyorgan.blogspot.com/2011_08_14_archive.html

To no surprise, The Gold Cartel utilized all of this Spec selling to reduce their net short position by 8,800 contracts. Last week, though they added 5,255 new shorts, they also added 14,080 longs. This brings their net short ratio all the way down to just 1.56:1. Again, for the sake of comparison, look at that CoT from 8/16/11. At $1900 gold, The Cartel was long just 160,562 and short 409,409 for a net short ratio of 2.55:1.

Digging deeper, what's the big difference between then and now? On 8/16/11, The Gold Cartel was long 160,562. Back on Tuesday, they were long 170,211. However, back in August of 2011 they were short 409,409 and as of last Tuesday they were short just 265,774. Instead of letting gold get away from them when it suddenly became the only currency alternative to fiat, The Cartel moved to aggressively smash price, an operation that continues to this day. In doing so, they've been able to reduce their net short position by 153,284 contracts or 61.6%! Or looked at another way, they've been able to reduce their paper-physical liability by 15,328,400 ounces or 477 metric tonnes!


Again, May13 contract expiration has distorted this report, regardless it's still quite interesting. Last week, the Large Specs dumped another 3,100 longs while covering just 300 shorts. This brings their net long ratio back down to just 1.52:1. The silver Small Specs were net neutral for the week are are still just barely net long.

The commercials in silver who have been taking on JPM in The Civil War actually dumped some longs last week into expiration. Their gross long position fell by 2,573 to 65,685. JPM et al seized upon the Large Spec and Comm selling and covered 5,507 shorts, down to 79,915. This lowers The Silver Cartel net short ratio all the way down to an incredible 1.22:1.

For perspective, let's once again review the CoT from 8/16/11, when silver was trading near $41.

  • Large Spec longs 8/16/11 = 32,697. Last Tuesday = 35,720
  • Large Spec shorts 8/16/11 = 10,769. Last Tuesday = 23,530
  • Large Spec net long ratio 8/16/11 = 3.06:1. Last Tuesday 1.52.1.
  • Comm Longs 8/16/11 = 34,555. Last Tuesday = 65,685
  • Comm Shorts 8/16/11 = 75,236. Last Tuesday = 79,915
  • Cartel net short ratio 8/16/11 = 2.18:1. Last Tuesday = 1.22:1.

Well, what stands out at you? Note that the Large Spec long and Cartel short positions are nearly unchanged over 20 months and a $17 drop in price. Then note the HUGE change in the Large Spec short and Commercial long positions. Also notice the difference between the commercial silver activity and the commercial gold activity. In gold over the exact same time period, the Comm long position is nearly unchanged. However, the silver Comm long position has nearly doubled!

Now I suppose we could really drill down into this and try to discern, by firm, how positions have changed. That's a topic for another day. For today, just think of this:

I laid out for you yesterday all of the many events that have occurred while gold has declined by $500. In summary, I concluded that late August of 2011 was a seminal period of time for the Forces of Darkness. They saw the collapse of confidence in every single fiat currency and the decision was made to attack gold and silver as they had become the only, true alternative to paper. This plan of action continues to this day. By containing gold and silver for the past 20 months, The Cartels have:

  • Reduced their net short position in gold by 153,284 contracts. This equates to 15,328,400 troy ounces of gold or roughly 477 metric tonnes.
  • Reduced their net short exposure in silver by 26,449 contracts or 132,245,000 ounces of silver or 4,113 metric tonnes.

As we head into next week, we should all feel pretty good about surviving this past one. Things looked pretty lousy back on Wednesday but we've since recovered and the charts don't look too bad. Now if we can just get a shove...and burst through resistance at $1485 and $24.80, we could quickly move right back to $1525 and $26 and be poised for an epic battle, fighting to move back into the 1525-1800 and 26-36 price ranges that had contained the metals since the August 2011 attack plan began.

OK, time to call it a week. Ole Turd's got a frosty beer waiting for him and I'm not sure if I can wait much longer. If I wrap up now, I might also be able to catch the Kentucky Oaks. By the way, I haven't studied the form yet but, from what I've seen, I like Normandy Invasion in The Derby tomorrow.

Have a great weekend!


About the Author

tfmetalsreport [at] gmail [dot] com ()


Mr. Fixkingboo
May 5, 2013 - 11:51pm

@ kingboo Google trends:

I love your analysis of the Google trends, I think you are correct in looking there to see what the rest of the world is thinking.

I have come to a conclusion that the powers that be want to clear the markets of gold and silver, before the big price reset. According to Jim Willie, the only physical gold left that has not yet been pillaged, is in the "Roman catacombs", which I think is his way of not saying "the Vatican".

Just thinking out loud, but would it be possible that the powers that be don't want to advertise within the borders of Italy that they are in the process of stealing all their gold?

Just a little tidbit to add to your analysis, keep looking at the Google trends, I think that can tell us a lot.

May 5, 2013 - 11:42pm

World Gold Council - SPDR Sponsor?

Jason Toussaint

Chief Executive Officer, World Gold Trust Services

Jason is Managing Director of the Investment sector and CEO of World Gold Trust Services, a wholly owned subsidiary of the World Gold Council and the Sponsor of the SPDR Gold Trust (GLD). Jason leads the investment and product development activities in the gold ETF market including initiatives focused on expanding the use of gold in modern portfolio construction. He is also responsible for leading the global operations, sales, and marketing of GLD, the world’s largest gold ETF with over $70b in assets under management.


Anyone want to enlighten me on WHAT "sponsor" implies? Does WGC own/facilitate the GLD or was it WGC that came up with the idea?

I am sure it doesn't really matter.................................

May 5, 2013 - 11:37pm

@Hagarth.......that's a good guess....

these days everything just seems like a guess....

but one thing is for sure.....the populous only sees what they want us to see....so google trends seems better at measuring "media saturation" and reaction than anything else.... it's just another tool for them to measure our reactions to their experiment......

May 5, 2013 - 11:37pm

@Texas Sandman

Standing for delivery on May silver seems profitable business. Just look at the following link


1000 oz silver bars are standard Comex/LBMA bars. I guess quite a few industrial users are standing for delivery at the moment.

May 5, 2013 - 11:33pm

12 Hours Of Hockey

First to admit I'm a little punchy after watching hockey since the AM (Mrs. Z is ready to snap) but Stay Strong Friends. Our time is near.


May 5, 2013 - 11:31pm
May 5, 2013 - 11:30pm

@kingboo Talk of Austerity/Gold

  • May 2, 2013, 5:58 a.m. ET

WGC: Gold-Backed Bonds an Alternative to Italian Austerity

By Laura Clarke

Gold-backed sovereign debt presents a good opportunity for Italy and other states facing significant financial challenges to regain the confidence of bond markets and lower funding costs, the World Gold Council said Thursday.

Gold-backed bonds are underpinned by gold collateral. This could be bonds partially backed by gold, or a tranche-based structure developed to appeal to different types of investors.

The WGC, which is funded by mining companies, said that unlike monetary interventions which can involve complex chains of causality and potential unintended consequences, using gold as collateral can be simple, direct and transparent.

The WGC added that such a strategy would be a more remedial answer for these nations than outright gold reserve sales, a strategy that has been discussed by Cypriot authorities. Concerns regarding this potential strategy helped send gold prices plummeting to a two-year low mid-April.

Italy received a $2 billion bailout from the German Bundesbank in 1974 when it put up its gold as collateral. Most recently, in 1991 India used its gold as collateral for a loan with the Bank of Japan and others.



Italy needs gold to remain undercover at least until CAUSE or PTB get access to the hoard. Not too sure that the masses are attached to Gold like the Indians. Just a guess.

May 5, 2013 - 11:27pm

oh, and another thing

Happy Sinko de Mayonaise....... it means mayonnaise in the sink....or mayonnaise from the sink.. something like that. I just know you're supposed to drink beer today....

May 5, 2013 - 11:23pm

Google Trends.....a few observations

I like to peek at Google Trends from time to time..... i always thought it was a decent indicator of what people were paying attention to...... but after studying some trends for an hour or so, i came to a different conclusion..... in fact, it's actually pretty eye-opening...... It would seem that google trends is a great tool if you want to measure "news saturation"..... and by that i mean the following: The general populous cannot start a trend on Google large enough to measure BEFORE the MSM create a large enough buzz about any given topic to drive the populous to search further on Google.......which then starts the Google search trend....... I was measuring "gold price" on Google trends when i realized that it was a very hot search in U.S....Moscow...India....Shanghai...Hong Kong....during April of this year.... but not so much in Italy.... hmmm? I sat back in my chair wondering "why doesn't Italy care about the price of gold like all these other countries? I could only come to one conclusion: lack of media coverage... So that begs the next question, which is this: Do all these countries just have better media coverage with more transparency than Italy? (no) or do we see only what the MSM wants us to see........ in other words, the news is only and EXACTLY what they want us to see, read...and react to..... whereas in Italy, this particular issue (of the gold price crash) was not something the PTB wanted or felt needed to be front page news......for whatever reason, the message wasn't necessary in Italy ...Hence the low search rating on Google trends for "gold price"......... And just because the price of gold dropped at a historic rate...does not justify a "breakout" on google trends...... no, breakouts are reserved for "mainstream" events....you know, like Justin Beaber...... so when you see "gold price" breakout on Google trends....it's because they splashed the news across enough front pages and tv crawls to get EVERYONE'S attention....... now why would that be such an important message to get through to everyone? hmmm?......i guess i'll have to think that through....

or maybe i'm just rambling.....

May 5, 2013 - 11:15pm

Geographic Ecstacy

Life is good - Turdville is not anywhere near Syria or Israel or the MENA Area (I hope).

Thank-you Turdville for an entertaining and informative weekend.

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