Friday, March 09, 2012

COMEX Commercial Traders Strongly Reduce Gold Shorts

HOUSTON --  As we expected, traders classed by the Commodity Futures Trading Commission (CFTC) as “commercial” in the combined commitments of traders report for COMEX gold futures (the legacy COT report), covered or offset a very large amount of their net short positioning according to data supplied by the CFTC.  The COT report was released today (Friday) at 15:30 ET for large trader positioning as of the close on Tuesday, March 6.

According to the CFTC COMEX commercial traders reduced their combined collective net short positioning (LCNS) for gold futures by 45,143 contracts or 18.4% to show 200,208 contracts net short.  Gold declined $109.85 or 6.2% for the Tuesday to Tuesday period.


Source:  CFTC for COT, Cash Market for gold.


This is the largest one-week reduction in commercial net short positioning for the legacy COT report since July 31, 2007, when the commercial net short position declined by 48,958 contracts in one week. 

COMEX commercial traders also very strongly reduced the LCNS for silver futures from 44,953 to 35,796 contracts net short, a reduction of 8,797 lots or 19.7% for the one week reporting period.  Silver fell a big $3.99 or 10.8% for the period, closing Tuesday at $32.90.  Just over $1.00 of the decline occured on COT reporting Tuesday.  Silver has inched higher each day since then.   

Apparently “the commercials” took advantage of the very large downdrafts for gold and silver last Tuesday to get the heck out of a meaningful amount of their downside bets for gold and silver futures. 

We will have much more about the COT for subscribers in our linked technical charts by the usual time on Sunday (by 18:00 ET). 

See additional COT information from the CFTC disaggregated commitments of traders report in the next post.


The Original
Vulture Speculator

Trading gold, silver and mining shares since 1980 with a focus on taking advantage of volatility extremes, Gene Arensberg analyses the markets through a basket of technical and fundamental indicators and shares his findings from time to time here at Got Gold Report. Mr. Arensberg has been quoted in the Wall Street Journal, Dow Jones MarketWatch, USA Today and dozens of other news organizations.

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