Speechless Turd

284
Fri, May 31, 2013 - 5:28pm

We knew that this week's CoT was going to be interesting but I didn't expect it to leave me speechless.

Look, I know I've been banging this drum for months and all the metals have done is go down. Got it. I read you loud and clear. But we're talking big picture, positioning stuff here. I am 100% firm in my belief that QE∞ caught the bullion banks with their pants down. All of the price action since 9/13/12 has been designed to alleviate the gigantic financial risk and potential liability of being short paper metal. By smashing price, against the fundamentals, from $1800 to $1350 and from $35 to $22, The Cartel Banks have accomplished two things:

  • They've been able to transfer the vast majority of their potential liability from themselves to the speculator sector (hedge funds, managed money, small investors).
  • And now, instead of being trapped short, they are a in position to profit from the inevitable explosion in price.
  • Even though it's blatantly criminal, you almost have to give them credit. That they've been able to pull this off in broad daylight is simply astounding. On the level of Oceans 11.

    Once again and with meaning: On 9/11/12, two days before the announcement of QE∞ and with gold already at $1800, The Gold Cartel was net short 237,091 Comex contracts. That's 23,709,100 paper troy ounces or about 737 metric tonnes of gold. As of last Tuesday, they are now net short just 59,221 contracts or about 184 metric tonnes. A reduction of just over 75%! Oh, and did I mention that, over the same time period, the GLD has been raided for 277 metric tonnes? Just thought I'd throw that in, too. Simply magnificent! The Crime of The Century! Ah, screw that. That's The Crime of The 20th Century, too!! Amazing.

    So, here are your numbers. Keep in mind that, for the reporting week, gold was up $1.30 while total open interest fell ahead of June13 expiration by 35,086 contracts. Also keep on mind that for Wednesday and Thursday of this week, total OI fell another 25,110 contracts. One can only imagine how much more long-term bullish these levels are as of this weekend.

    GOLD

    For the week, the Large Specs dumped 16,836 longs and added 6,544 new shorts (quite a few of which got squeezed yesterday and put back on today). This brings the Large Spec net long total down to just 56,879 contracts. Do you think that's a lot? Hmmm. What if I told you that, back on 9/11/12, the Large Specs were net long 182,016? From a different perspective, back on 9/11/12, the Large Spec net long ratio was 6.62:1. As of last Tuesday, it was down to1.49:1. And here's a little more perspective for you: At the price lows on 12/27/2011, the Large Specs were net long 130,788 with a ratio of 4.57:1 and at the price lows of last August they were net long 114,304 with a ratio of 3.43:1. Again, as of last Tuesday, the Large Specs were net long just 56,879 contracts and had a net long ratio of 1.49:1.

    The Small Specs also reduced their net long position by a little over 1500 contracts and they are now net long just 2,342 total contracts. Again, by contrast, back on 9/11/12 the Small Specs were net long 55,075. That's a reduction of nearly 96%!

    And The Gold Cartel. What did they accomplish this week? Not much...No, they just reduced their net short exposure by nearly 25,000 contracts! Again and as stated above, The Gold Cartel is now net short just 59,221 contracts or 184 metric tonnes of paper gold. Back on 9/11/12, they were net short 237,091 contracts or 737 metric tonnes of paper gold. The new Cartel net short ratio is just 1.34:1. This means that they are now long 3 contracts for every four that they are short. Incredible!

    Once again for perspective, at the most recent price bottoms near $1525 in Dec of 2011 and August of 2012, The Gold Cartel was still net short 163,932 and 143,940, respectively. Their net short ratios on those occasions were 2.01:1 and 1.98:1. Again, as of last Tuesday, the numbers are 59,221 and 1.34:1.

    SILVER

    While interesting, the silver CoT isn't nearly as wild as gold. It's still crazy, though, as you'll see. For the reporting week, silver was down about 25¢ and its OI fell by about 3,300.

    The Silver Large Specs dumped another 1,474 contracts this week while adding another 2,750 longs. That net long reduction leaves them net long just a little over 4,500 contracts and drops their net long ratio down to an almost inconceivable 1.16:1. Again, consider these levels and dates for perspective:

    • On 9/11/12, they were net long 31,482 contracts and had a net long ratio of 4.18:1.
    • At the 12/27/11 price bottom, they were net long 6,855 with a ratio of 1.40:1
    • At the 8/14/12 price bottom, they were net long 15,407 with a ratio of 1.93:1.

    The Small Specs in silver had little change and are of little consequence right now.

    The silver commercials continue to astound. Though the everybody-but-JPM crowd sold 1,326 longs last week, they're still gross long an amazing 66,428 contracts. All of this commercial and spec selling allowed JPM and The Forces of Darkness to cover 4,918 shorts, leaving them gross short just 74,762. This commercial net short reduction of nearly 3,600 contracts leaves them net short just 8,334 contracts and an incredibly, nearly-impossibly low net short ratio of just 1.13:1. Again, for perspective:

    • Caught with their pants down on 9/11/12, The Forces of Evil were net short 47,272 contracts or 236,360,00 troy ounces of paper silver or about 7,350 metric tonnes. They also had a net short ratio of 2.47:1.
    • As of last Tuesday, The Evil Ones were net short 8,334 contracts or 41,670,000 ounces. That's 1,297 metric tonnes or a reduction of over 83%!
    • At the $26 price low of 12/27/11, they were net short 14,312 contracts with a net short ratio of 1.34:1
    • And at the price low of 8/14/12, they were net short 23,402 with a ratio of 1.49:1
    • Again, as of last Tuesday, they are net short just 8,334 contracts with a ratio of 1.13:1

    Look, I could probably keep typing for hours about the significance of all of this but I think I'll stop here. All you need to know is this: The Bullion Banks have now reduced their net liability in gold by over 75% and, in silver, by over 83%...all since the game-changing announcement of QE∞ last September. Rather than once again trying to cover into rising prices with disastrous results (see April of 2011 in silver and August of 2011 in gold), an evil, insidious and outright criminal plan was made and executed to crush the paper price of both metals. By flawlessly executing this plan, The Bullion Banks have so reduced their potential liability that there can be no doubt that prices will soon be allowed to rise again. When? That's impossible to say, of course. Maybe not until The BBs are net long both gold and silver. Who's to say for certain? But I do know that we are very, very close to a price bottom here when you take this CoT situation and the physical market demand into consideration. Plain and simple.

    Finally, we'll have to see how things go once trading resumes Sunday evening. The action today certainly brings my Wednesday post back into play...the one where I speculated that one more washout could come before "a surprisingly disappointing NFP number" on Friday. I guessed that another test of $1350 was possible with a stop-running drop in silver to $21.50 or even a double bottom at $21. Again, given today's action and the $10 or so taken out of gold on the Globex this afternoon, that scenario certainly seems possible, if not likely. Here are two charts that I printed this morning, before this afternoon's decline.

    So, anyway, keep the faith. Next week promises to be volatile but fun nonetheless. Enjoy your weekend and try to relax a little. Then come back on Monday with your game face on.

    TF

    About the Author

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    turd [at] tfmetalsreport [dot] com ()

      284 Comments

    Peoples Front of Judea
    May 31, 2013 - 6:45pm

    2ND

    GOOD END TO A GOOD WEEK ...YES....AAWWW NUTS BUT 4 IS OK

    ag1969
    May 31, 2013 - 6:45pm

    2nd Amendment

    A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.

    May 31, 2013 - 6:45pm
    rl999
    May 31, 2013 - 6:46pm

    4th

    hooray. the shenanigans will continue until something breaks beyond their ability to conceal it. although I would not be the least bit surprised to see a comex default spun as gold negative.

    Dimeboy
    May 31, 2013 - 6:46pm

    a Fifth

    of Scotch for anyone that can answer my question on Silver Keisers from the end of the last thread.!

    Big Buffalo
    May 31, 2013 - 6:50pm

    House

    Seems seller and buyer have agreed on a price. We are moving forward with a home purchase!!

    Can't wait to be able to add some silver and gold coins to the house.

    erewenguy
    May 31, 2013 - 6:51pm

    thurd

    Although the price action of G&S have been disappointing, while the commercials were getting their books right for the next leg up I have also been able to better position myself. Although I would like to see some display of "strength" in price, I have come to the conclusion that there is no "strength" or "weakness" in prices of PMs. The prices have nothing to do with supply and demand, are simply valued where the EE wants them to be at that time.

    Mr. Fix
    May 31, 2013 - 6:52pm

    1

    Have a happy weekend everyone!

    Road_Scholar
    May 31, 2013 - 6:55pm

    The stock/bond markets will crash

    then PMs will sky rocket, or do PMs sky rocket then the stock/bond markets crash?!

    Does it matter? Keep stacking...

    Al Huxley
    May 31, 2013 - 6:57pm

    Once Commercials Are Net Long

    ... they can stand aside and let the paper market fail. Given the supply-demand dynamics (which should be transparently obvious, except that people lose all common sense in the PM market, especially when being perpetually misled by the complicit/moronic MSM), and supported by the trends highlighted here, and obvious for months, it seems pretty apparent that this is the bullion banks' end-game. Get net long, and then cease to play the paper game, leaving the speculators as the scapegoats for the collapse of the comex and LMBA ('why were they selling all those contracts if they knew they couldn't deliver - BAD SPECULATORS'). I think historically the idea of waiting for the turn in Commercial activity (for them to start increasing short positions - ala Jake Blues comments on other threads) would be a good plan, but I think they have no intention of playing that game this time around.

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    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
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    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
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    Key Economic Events Week of 8/26

    8/26 8:30 ET Durable Goods
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    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
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    8/14 10:00 ET Business Inventories
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