In it, the Big 4 traders are short about 84 days of world silver production, down about 16 days from the prior week’s report. The ‘5 through 8’ large traders are short an additional 32 days of world silver production…down about 1 day from the prior COT Report for a total of about 116 days that the Big 8 are short…down a whopping 17 days from last week’s COT report. [In the prior reporting period they were short 133 days of world silver production.]
That 116 days that the Big 8 are short, represents just under four months of world silver production, or 271.9 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 199.2 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is 271.9 million troy ounces. So the short position of the Big 4/8 traders is larger than the total Commercial net short position by 271.9-199.2=72.7 million troy ounces…up about 23.6 million troy ounces/4,720 COMEX contracts from last week’s report.
This long buying by the small commercial traders was in direct competition with the buying by the Big 4/8 shorts.
The reason for the difference in those numbers two paragraphs ago…as it always is…is that Ted’s raptors, the 31-odd small commercial traders other than the Big 8, are net long that amount…72.7 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 now in gold as well.
As per the first paragraph above, the Big 4 traders in silver are short around 84 days of world silver production in total. That’s about 21 days of world silver production each, on average…down 4 days from last week’s COT Report. The four big traders in the ‘5 through 8’ category are short 32 days of world silver production in total, which is 8 days of world silver production each, on average…down a bit from last week’s COT Report.
I don’t remember the last time that the short positions of the Big 8 was this low, but I know that Ted will have that data in his weekly review this afternoon.
And it’s also obvious that the Big 4 shorts were much more aggressive in their short covering than the Big ‘5 through 8’ shorts during this past reporting week…although much more in silver than in gold.
The Big 8 commercial traders are short 35.2 percent of the entire open interest in silver in the COMEX futures market, which is down a knee-wobbling amount from the 42.4 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 40 percent mark. In gold, it’s 46.3 percent of the total COMEX open interest that the Big 8 are short, which is down only a tiny amount from the 47.0 percent they were short in last week’s COT Report — and something over the 50 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 50 days of world gold production, down about 3 days from last week’s COT Report. The ‘5 through 8’ are short 27 days of world production — up about 1 day from last week’s report, if you can believe it…for a total of 77 days of world gold production held short by the Big 8 — and down about 2 days from the prior COT Report. Based on these numbers, the Big 4 in gold hold about 65 percent of the total short position held by the Big 8…down about 2 percentage points 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 72, 73 and 67 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver is down about 2 percentage points from last week’s COT Report…platinum is also down 2 percentage points from a week ago — and palladium is down about 1 percentage point week-over-week.
And as I keep saying month after month, despite the recent improvements in the short positions of the Big 4/8 traders…including the price bombings last Friday — and again on Monday, they’re 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 still 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. Yes, they did increase their short positions by notable amounts during this past reporting week, but not enough to make any material difference to the short positions of the Big 8 traders…particularly in gold. And because of that, the Big 4/8 traders can’t cover.
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.
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