Friday, April 05, 2013

Gold and Silver Disaggregated COT Report (DCOT) for April 5

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.

Update 1:  Adds charts for gold and silver short positioning by Managed Money traders.

This week shows an important and dramatic change in the silver futures positioning. 

Note:  Spec Funds (Managed Money) have become net short silver futures as of this report. Note also the extremely low net short positioning of the Producer/Merchants for gold.  The Producer Merchants, the category which includes bullion banks, have not had so few bets that gold would fall in price since the 2008 panic.  That is the same thing as saying that the large commercial traders are currently the least fearful that gold prices will fall further since December 9, 2008, when they then held just 80,669 contracts net short with gold then near $776 the ounce.

  20130405 DCOT

(DCOT Table for April 5, for data as of the close on Tuesday, April 2.   Source CFTC for COT data, Cash Market for gold and silver.) (More...)

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.

Spec Funds Record High Short Position for Silver

If there is one particular chart of the many we review each week that we might want to call attention to, it would have to be the chart below - the gross short positioning of traders classed by the CFTC as Managed Money, aka the Spec Funds.

20130405 MM Silver Shorts

Managed Money Net Short Silver Futures for First Time in over Five Years

Because of that extremely high Managed Money silver short position, collectively the Spec Funds showed their largest ever net short, repeat net short position for silver futures since the inception of the CFTC disaggregated commitments of traders reports (data begins in 2006).  As of April 2, with silver then showing a last trade of $27.26, Managed Money traders reported a net short position of 2,497 lots as shown in the chart below. 

20130405 MM Silver Net

Managed Money traders have been net short silver futures before, for one reporting week on September 4, 2007, when they reported being 92 contracts net short with silver then changing hands at $12.09 an ounce.  Two months later, silver had tested $15.  Six months later, in March of 2008 silver had cleared $20 - just before the 2008 panic took control of the markets. 

Managed Money Near Record High Short Gold Futures

Perhaps as a "runner up" we might point to the chart below as important and noteworthy - the gross short positioning of Managed Money traders in gold futures as of Tuesday. 

20130405 MM Gold Shorts

The Managed Money short positioning charts for gold and silver have something very much in common, in terms of what they represent. 

Much more for subscribers in the chart updates this weekend. 


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The Original
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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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