In this week’s ‘Days to Cover’ chart, the Big 4 traders are short about 115 days of world silver production, up about 3 days from last week’s COT Report. The ‘5 through 8’ large traders are short an additional 41 days of world silver production, up about 1 day from last Friday’s report, for a total of about 156 days that the Big 8 are short — and up 4 days from last week’s report. [In last Friday’s COT Report, they were short 152 days of world production.]
That 156 days that the Big 8 are short, represents five months and a bit of world silver production, or 334.5 million troy ounces of paper silver held short by the Big 8 commercial traders.
In the COT Report above, the Commercial net short position in silver was reported by the CME Group at 285.8 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is 334.5 million troy ounces. So the short position of the Big 4/8 traders is larger than the Commercial net short position by 334.5-285.8=48.7 million troy ounces…down 60.2 million troy ounces from last week’s COT Report…12,040 COMEX contracts…the amount of long contracts they sold during the past reporting week.
The reason for the difference in those numbers is that these raptors, the small commercial traders other than the Big 8, are net long silver by that amount…48.7 million troy ounces/9,740 COMEX contracts…which is getting close to the bottom of the barrel as I stated in my discussion in the COT Report for silver further up.
As per the first paragraph above, the Big 4 traders in silver are short around 115 days of world silver production in total. That’s just about 29 days of world silver production each, on average…up a bit from last Friday’s report. The traders in the ‘5 through 8’ category are short 41 days of world silver production in total…10 days and a bit of world silver production each on average — up a small amount from last week’s COT Report.
The Big 8 traders are short 42.5 percent of the entire open interest in silver in the COMEX futures market, which is up from the 40.0 percent they were short in the last COT report. And once whatever market-neutral spread trades are subtracted out, that percentage would certainly be close to the 50 percent mark. In gold, it’s 42.9 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 41.8 percent they were short in last Friday’s COT Report — and also close to the 50 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 60 days of world gold production, up 3 days from last Friday’s COT Report. The ‘5 through 8’ are short 28 days of world production, down about 1 day from last week…for a total of 88 days of world gold production held short by the Big 8 — and up 2 days from last Friday’s COT Report. Based on these numbers, the Big 4 in gold hold about 68 percent of the total short position held by the Big 8…up about 2 percentage points from last Friday’s COT Report.
Of course the 3-day jump in the Big 4 short position in gold was because of the approximately 8,500 contracts they were forced to go short during this past reporting week as mentioned in the above 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 74, 78 and 63 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver is about unchanged from last week…platinum is down about 1 percentage point from a week ago — and palladium is down about 4 percentage points week-over-week.
So still nothing has changed. The Big 4/8 traders are still very firmly stuck on the short side in both gold and silver — and increased their net short position in gold and silver by very decent amounts for the third reporting week in a row…and it was all the Big 4..as the Big ‘5 through 8’ didn’t do a thing. As Ted has been saying, it’s his raptors, the small commercial traders other than the Big 8, that are mostly running the price management show…especially in silver. That was the case during this last reporting week as well — and in the many weeks/months preceding that. The Big 4 were obviously active in capping their respective prices when necessary, especially in gold, while the Big ‘5 through 8 shorts’ just sat on their hands.
As I’ve pointed out before — and will mention again, the Big 4/8 shorts will never be able to extricate themselves fully from the short side, if that was ever their intent…particularly the Big 4. At some point they’re going to have eat the lion’s share of the short positions that they currently hold. The only way that can do that is to go into the market and buy longs…or deliver physical metal, but only if the long holders are in a position to accept delivery. A lot of them aren’t.
And the moment the rest of the traders in the COMEX futures market sees that, the ‘ask’ will disappear — and prices will explode…unless the powers-that-be at the CFTC and CME Group have something nefarious up their sleeves, or they’re bailed out by the likes of the Exchange Stabilization Fund.
However, the circumstance in silver have been altered by an unimaginable [and monstrously bullish] amount by Ted’s discovery of the approximately 800 million troy ounce physical short position in silver that Bank of America now holds in the OTC market.
He has also come to the conclusion that BofA is short about 30 million ounces of gold in the OTC market as well.
The situation regarding the Big 4/8 shorts in silver, gold [and platinum] continues to be far beyond obscene, twisted and grotesque — and has been getting worse over the last three weeks. As Ted correctly points out ad nauseam, its resolution will be the sole determinant of precious metal prices going forward.
As always, nothing else matters.