Friday, August 03, 2012

Gold and Silver Disaggregated COT Report (DCOT) for August 3

UPDATE 1:  Adds charts, commentary on large changes in gold futures trader positioning.

HOUSTON -- This week’s Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday.  Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below.


(DCOT Table for Friday, August 3, 2012, for data as of the close on Tuesday, July 31.   Source CFTC for COT data, Cash Market for gold and silver.) 

In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting “longer” and red figures are traders getting less long or shorter.

All of the trader’s positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report.

Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week’s technical changes, should be completed by the usual time on Sunday (18:00 ET).  
As a reminder, the linked charts for gold, silver, mining shares indexes and important ratios are located in the subscriber pages.  In addition Vultures have access anytime to all 30-something Vulture Bargain (VB) and Vulture Bargain Candidates of Interest (VBCI) tracking charts – the small resource-related companies that we attempt to game here at Got Gold Report.   Continue to look for new commentary directly in the charts often.


Edit at 16:35 CT.  Worthy of mention:  Last week Traders classed by the CFTC as Other Reportables reported their highest net long position for gold futures in the history of the disaggregated commitments of traders report data (going back to 2006). The Other Reportables then showed a net long position of 53,168 contracts as of July 24.  (The previous high was in the December 7, 2010 report when they reported holding 52,994 lots net long with gold then near $1,401.) 

This week, as of Tuesday, July 31, with gold closing at $1,614.24 up $33.59 or 2.1% for the COT week, Other Reportable traders reduced that net long position by 7,961 lots to show 45,207 contracts net long as shown in the DCOT chart below. 


Source for all charts CFTC for COT, Cash Market for gold.

Last week traders classed as Managed Money reported a net reduction of their net long position of a large 21,547 contracts to a low 59,809 lots net long gold.  (Then the lowest net long position for the Funds since December 9, 2008 during the 2008 panic, when they reported holding 57,835 lots net long with gold near $776.)

This COT week Managed Money traders were net buyers of a large 21,048 contracts, back up to 80,857 contracts net long, as shown in the DCOT chart below. 


Last week Swap Dealer traders returned to modestly net long by 1,426 contracts flipping from the previous week’s showing of 618 lots net short. 

This week Swap Dealers were heavy net sellers of 9,692 lots to once again return to the net short side (by 8,266 lots), joining the Producer/Merchants and the Other Reportables on the strong selling side of the gold futures ledger.


By all appearances, as gold tested the $1,620s on COT Tuesday it met with determined “opposition” by the veteran traders required to report their positioning to the CFTC.  However, the net position changes may not tell the entire story.  As just one example we note that a big part of the reason Managed Money traders’ collective net long position increased by 21,048 contracts was not just because they added a big number of long contracts for gold.  It was also in large part because the Funds covered a big 8,815 contracts or 26.6% of their short contracts – in one week, as shown in the DCOT chart below.

The Fund’s short position had become "gold rally fuel," as we have been saying it would, most recently in the GGR video update for July 29.  As a courtesy we shared that video here for our entire readership.  (Link to the July 29 GGR video.)         

If it isn't obvious, then please note that Managed Money traders chose to strongly reduce their "insurance" short bets for gold this COT week.  Notice, please, what the price of gold did shortly after they covered  a big chunk of their record high short position in 2008.  (It began a protracted rally.) 

We will have more in the GGR subscriber charts this weekend, including the large amount of Fund (Managed Money) shorts covered for silver futures (21.5% of their record short position covered in one week).   

That is all for now.  


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.

"I've been a huge fan of Gene and his amazing work for years..."

Brien Lundin, CEO, Jefferson Financial, Host of the annual New Orleans Investment Conference and Publisher of Gold Newsletter

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