In it, the Big 4 traders are short about 112 days of world silver production, up about 8 days from the prior week’s report. The ‘5 through 8’ large traders are short an additional 34 days of world silver production…down about 4 days from the prior COT Report for a total of about 146 days that the Big 8 are short…up about 4 days from last week’s COT report. [In the prior reporting period they were short 142 days of world silver production.]
As Ted mentioned on the phone yesterday, the Big 4 added to their short position during the reporting week — and the Big ‘5 through 8’ traders decreased their short position during the same period — and that’s very apparent in the numbers above.
That 146 days that the Big 8 are short, represents just about 5 months of world silver production, or 341.1 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 315.5 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is 341.1 million troy ounces. So the short position of the Big 4/8 traders is larger than the total Commercial net short position by 341.1-315.5=25.6 million troy ounces…down 20 million troy ounces/4,000 COMEX contracts from last week’s report.
It was this selling that had the mechanical effect of increasing the Commercial net short position.
The reason for the difference in those numbers two paragraphs ago…as it always is…is that Ted’s raptors, the 26-odd small commercial traders other than the Big 8, are net long that amount…25.6 million troy ounces.
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, platinum and palladium — and for almost the last three weeks, in gold as well!
As per the first paragraph above, the Big 4 traders in silver are short around 112 days of world silver production in total. That’s about 28 days of world silver production each, on average…up two full days from last week’s COT Report. The four big traders in the ‘5 through 8’ category are short 34 days of world silver production in total, which is about 8.5 days of world silver production each, on average…down one full day from last week’s COT Report.
The Big 8 commercial traders are short 43.4 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 42.1 percent they were short in the prior week’s COT report. And once whatever market-neutral spread trades are subtracted out, that percentage would be 50 percent, for all intents and purposes. In gold, it’s 45.4 percent of the total COMEX open interest that the Big 8 are short, which is basically unchanged from the 45.3 percent they were short in Monday’s COT Report — and a bit over the 50 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 49 days of world gold production, up about 1 day from last week’s COT Report. The ‘5 through 8’ are short 24 days of world production — also up 1 day from last week’s report…for a total of 73 days of world gold production held short by the Big 8 — and obviously up 2 days from the prior COT Report. Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8…down about 1 day from the prior week’s COT Report.
The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 77, 76 and 71 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver [not surprisingly] is up about 4 percentage points from last week’s COT Report…platinum is unchanged from a week ago — and palladium is up about 6 percentage points week-over-week.
But in actual fact, very little has changed, as the Big 8 shorts are still hugely short in all four precious metals in the COMEX futures market. But it’s now mostly the Big 4…or probably just the Big 2 or 3…Citigroup, Bank America and HSBC — and the above chart tells you all you need to know about their current plight.
They’re stuck on the short side — and that’s for the very simple reason that the Managed Money traders are no longer willing to go mega short like they used to in the past. Because of that, the Big 4/8 traders can’t cover.
There’s only two ways out for them…deliver physical metal into their short positions, or buy longs and cover that way…driving its price to the moon in the process. And as I’ve stated before, a far out in left field option would be to close the COMEX for futures trading in the four precious metals and let them trade in the spot market.
The situation regarding the Big 4/8 shorts continues to be beyond obscene, twisted and grotesque…especially the Big 2/4 — and as Ted correctly points out, its resolution will be the sole determinant of precious metal prices going forward.