Friday, October 25, 2013

Gold and Silver Disaggregated COT Report (DCOT) for October 1

Update 1:  Adds data and charts from the CFTC Bank Participation Report for October 1 data.   U.S. bullion trading banks increase their unusual net long positioning for gold and reduce their net short positioning for silver futures. 

HOUSTON – Today the Commodity Futures Trading Commission (CFTC) released data for the disaggregated commitments of traders (DCOT) and Legacy COT report as of Tuesday, October 1. This is the COT data that would have been released October 4. The recap table below compares the October 1 data with the previous week’s data, including the net positioning of traders the CFTC classes as “Commercial” in the Legacy COT report. (Table and charts below.)


20131025 DCOT for Oct 1 data

(DCOT Table for the October 4 release date and Legacy COT commercial positioning for data as of the close on Tuesday, October 1.   Source CFTC for COT data, Cash Market for gold and silver prices.)  Please note:  The data shown is obviously delayed owing to the 16-day partial government shutdown. The CFTC has released a schedule for the “catch up” of COT data as we noted in this blog post.  According to the CFTC: 

The CFTC expects to release two more of the delayed COT reports during the week of October 28, 2013 and at least two more of the delayed COT reports during the week of November 4, 2013. The CFTC expects that it will resume its previously announced COT report schedule by the November 8, 2013 release date.

Obviously the data in the table above is quite dated now and we can assume there have been important changes to the data since. 

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.

We also focus on the Legacy COT positioning of traders deemed “Commercial” by the CFTC, which includes Producers, Merchants, Processors and Users, plus Swap Dealers in a single category.  The Legacy COT report preceded the Disaggregated COT report and we have tracked and charted it for many years, focusing on the movement and positioning of commercial traders – The “Big Hedgers.”   

 

***Update 1:  We track the positioning of U.S. banks in futures (futures only) as reported by the CFTC in the monthly Bank Participation Report (BPR). In gold futures (ignoring options on futures), from September 3 to October 1 gold fell a net $124.39 or 8.8% (from $1,411.99 to $1,287.60).  As gold fell, the 4 reporting U.S. banks INCREASED their unusual net long COMEX futures position by 13,101 contracts or 29% from 44,906 to 58,007 contracts net long. 

20131025 Bank Participation Gold
(Reporting U.S. bullion trading Bank positioning. Source for data in both charts CFTC for bank participation, Cash Market for gold and silver prices, GGR. The chart is constructed to capture a “normal” net short position by the usually hedging U.S. bullion trading banks, so a negative figure actually represents a net long position.)  Clearly as gold was under pressure at the end of September the U.S. bullion trading banks were adding to their unusual net long exposure for gold.

In silver futures, from September 3 to October 1 silver fell a net $3.09 or 12.7% (from $24.25 to $21.16).  As silver fell, less than four (and possibly only two*) reporting U.S. banks decreased their net short COMEX futures position by 4,769 contracts or 20% from 23,675 to 18,906 contracts net short.

20131025 Bank Participation Silver

The October 1 net short position of the reporting U.S. banks for silver futures is the lowest since July 3, 2012, when the banks reported a net short position then of 18,272 contracts with $28.25 silver. 

 

 

So as silver was sold off 12.7% during the month of September, the U.S. bullion trading banks took advantage of the selling to cover about 1/5 of their collective hedges (they covered 20% of their net shorts), down to the lowest level in a little over a year as shown on the chart.   

Interestingly, as of October 1, the four reporting U.S. bullion trading banks' net positions were 15.5% of the total open interest net long for gold and (less than four banks) were 16.4% of the total open interest net short for silver.  

A reminder:  This is from data that was due to be released October 4 but was delayed until today owing to the partial government shutdown. There has undoubtedly been significant changes to the data since October 1.  A new Bank Participation Report is due to be released on Friday, November 8, for data as of the close on Tuesday, November 5.   

* The CFTC does not report the number of reporting banks, either U.S. or non-U.S. banks, when the number falls below four in either category.    

 


Comments



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


Contact Us