Gold & Silver COT Report 1/18/13: Commercials in Silver Still a Massive 210 Million Oz Net Short!

By SD Contributor Marshall Swing:

Gold & Silver COT Report 1/18/13:

Commercial longs beefed up 1360 contracts to their total on the week and a large 2,126 shorts to end the week with 47.96% of all open interest, an increase of 0.26% in their share since last week, and now stand as a group at 210,160,000 ounces net short, which is a slight increase of 3,835,000 net short ounces from the previous week.


Large speculators added 1,125 longs to their total while adding 647 short contracts increasing their net long position to 142,860,000 ounces, an increase in their net long position of almost 2.4 million ounces from the prior week.

Small speculators increased 1,072 longs from their total and picked 783 short contracts for a net long position of 67,300,000 ounces an increase of almost 1.5 million ounces net long from the prior week.

Silver started the COT reporting week at about $30.39 and closed at $31.37 on a week that saw steady price increase and one mild raid.  By the end of the calendar week, silver reached $31.89

This price trend is not at all surprising considering all the long buying we saw in gold from the previous reporting period.  This is one of the very few weeks where total numbers of silver contracts have increased in absolutely all categories, longs and shorts.

There was a decrease in the non-commercial spreading category of almost 700 contracts and an increase in the total open interest category of 2,891 contracts so there has been a marked increase in new money entering the market with no effort to knock down price.

In gold, we see somewhat differing numbers as the speculators were forced out of almost 4,100 short contracts combined due to the steady price increase making their positions intolerable.  The swap dealers were the beneficiaries of those force outs as they sold 3,522 longs for significant profits.  Small speculators bought up a staggering 3,489 additional long contracts so we can bet the run up in gold price is not going to be allowed to continue much longer.

In fact, they were played like a fiddle on Thursday as within a short time price fell from $1681 to $1669 in an effort by the commercials to dislodge many of those speculator longs.  Then price zoomed back up to $1687 due primarily to commercial long buying with speculators taking much of the short side of those contracts initiallty only to be forced out of those positions within another hour.

It’s a great game for the gold commercials who have 56% of all gold longs and shorts!

A fair and free market?  I think not!