The Big 4 traders are short about 127 days of world silver production, up about 5 days from the prior week’s report. The ‘5 through 8’ large traders are short an additional 40 days of world silver production…up about 1 day from the prior COT Report for a total of about 167 days that the Big 8 are short…up 6 days from last week’s COT report. [In the prior reporting period they were short 161 days of world silver production.]
This represents a bit over five and a half months of world silver production, or about 389 million troy ounces of paper silver held short by the Big 8.
In the COT Report above, the Commercial net short position in silver was reported by the CME Group at 366 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is around 389 million troy ounces. So the short position of the Big 4/8 traders is larger than the total Commercial net short position by about 389-366=23 million troy ounces…down about 10 million troy ounces from last week’s report.
That 10 million troy ounces equates to about 2,000 COMEX contracts, which made up the difference between the change in the Commercial net short position in silver — and what the Big 4/8 sold.
The reason for the difference in those numbers two paragraphs ago…as it always is…is that Ted’s raptors, the 30-odd small commercial traders other than the Big 8, are net long that amount…23 million troy ounces…which has been shrinking rapidly over the last six weeks or so — and is down about 130 million ounces from its peak.
Another way of stating this [as I say every week in this spot] is that if you remove the Big 8 shorts from the commercial category, the remaining traders in the commercial category are net long the COMEX silver market. It’s the Big 8 against everyone else…a situation that has existed for almost five decades in silver — and in platinum and palladium as well…and up until this week, in gold.
As per the first paragraph above, the Big 4 traders in silver are short around 127 days of world silver production in total. That’s a bit under 32 days of world silver production each, on average…up a bit over a day from last week’s COT Report. The four big traders in the ‘5 through 8’ category are short 40 days of world silver production in total, which is 10 days of world silver production each, on average…up a tiny bit from last week’s COT Report.
The Big 8 commercial traders are short 43.8 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from the 45.0 percent they were short in last week’s COT report. And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit over the 50 percent mark. In gold, it’s 43.4 percent of the total COMEX open interest that the Big 8 are short, which is down a tiny bit from the 43.6 percent they were short in the prior week’s COT Report — and around the 50 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 53 days of world gold production, up about 3 days from last week’s COT Report. The ‘5 through 8’ are short 22 days of world production — up about 1 day from last week’s report…for a total of 75 days of world gold production held short by the Big 8 — and up 4 days from last Friday’s COT Report. Based on these numbers, the Big 4 in gold hold about 71 percent of the total short position held by the Big 8…up about 1 percentage point from last week’s report.
As mentioned further up, Ted said that JPMorgan is long around 4,000 contracts in gold, down a couple of thousand contracts from the prior week’s COT Report — and market neutral in silver. They have been a non-factor in the COMEX futures market for the last year and a bit…leaving the other Big 8 traders to struggle through on their own.
The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 76, 78 and 73 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver is mostly unchanged from last week’s COT Report…platinum is down about 1 percentage point from a week ago — and palladium is down about 3 percentage points week-over-week.
The Big 8 shorts are still hugely exposed in all four precious metals in the COMEX futures market, especially the Big 4…or maybe just the Big 2 now…Citigroup and HSBC. Most of them increased their short positions in both gold and silver during the reporting week — and the above chart tells you all you need to know about their current plight. They’re stuck — and there’s only two ways out for them…deliver physical metal into their short positions, or buy longs and cover that way.
The situation regarding the Big 4/8 shorts continues to be beyond obscene, twisted and grotesque — and as Ted correctly points out, its resolution will be the sole determinant of precious metal prices going forward.
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