Turd Ferguson, of the TF Metals Report, does superb work and commentary on the precious metals markets. His latest analysis on Friday’s Commitment of Traders Report caught my attention for a number of reasons, in addition to it being so well done. Here it is with his permission to show to you:
Friday, May 31, 2013 at 5:28 PM
We knew that this week’s COT was going to be interesting but I didn’t expect it to leave me speechless.
Look, I know I’ve been banging this drum for months and all the metals have done is go down. Got it. I read you loud and clear. But we’re talking big picture, positioning stuff here. I am 100% firm in my belief that QE8 caught the bullion banks with their pants down. All of the price action since 9/13/12 has been designed to alleviate the gigantic financial risk and potential liability of being short paper metal. By smashing price, against the fundamentals, from $1800 to $1350 and from $35 to $22, The Cartel Banks have accomplished two things:
- They’ve been able to transfer the vast majority of their potential liability from themselves to the speculator sector (hedge funds, managed money, small investors).
- And now, instead of being trapped short, they are a in position to profit from the inevitable explosion in price.
Even though it’s blatantly criminal, you almost have to give them credit. That they’ve been able to pull this off in broad daylight is simply astounding. On the level of Oceans 11.
Once again and with meaning: On 9/11/12, two days before the announcement of QE8 and with gold already at $1800, The Gold Cartel was net short 237,091 Comex contracts. That’s 23,709,100 paper troy ounces or about 737 metric tonnes of gold. As of last Tuesday, they are now net short just 59,221 contracts or about 184 metric tonnes. A reduction of just over 75%! Oh, and did I mention that, over the same time period, the GLD has been raided for 277 metric tonnes? Just thought I’d throw that in, too. Simply magnificent! The Crime of The Century! Ah, screw that. That’s The Crime of The 20th Century, too!! Amazing.
So, here are your numbers. Keep in mind that, for the reporting week, gold was up $1.30 while total open interest fell ahead of June13 expiration by 35,086 contracts. Also keep on mind that for Wednesday and Thursday of this week, total OI fell another 25,110 contracts. One can only imagine how much more long-term bullish these levels are as of this weekend.GOLDFor the week, the Large Specs dumped 16,836 longs and added 6,544 new shorts (quite a few of which got squeezed yesterday and put back on today). This brings the Large Spec net long total down to just 56,879 contracts. Do you think that’s a lot? Hmmm. What if I told you that, back on 9/11/12, the Large Specs were net long 182,016? From a different perspective, back on 9/11/12, the Large Spec net long ratio was 6.62:1. As of last Tuesday, it was down to1.49:1. And here’s a little more perspective for you: At the price lows on 12/27/2011, the Large Specs were net long 130,788 with a ratio of 4.57:1 and at the price lows of last August they were net long 114,304 with a ratio of 3.43:1. Again, as of last Tuesday, the Large Specs were net long just 56,879 contracts and had a net long ratio of 1.49:1. The Small Specs also reduced their net long position by a little over 1500 contracts and they are now net long just 2,342 total contracts. Again, by contrast, back on 9/11/12 the Small Specs were net long 55,075. That’s a reduction of nearly 96%!And The Gold Cartel. What did they accomplish this week? Not much…No, they just reduced their net short exposure by nearly 25,000 contracts! Again and as stated above, The Gold Cartel is now net short just 59,221 contracts or 184 metric tonnes of paper gold. Back on 9/11/12, they were net short 237,091 contracts or 737 metric tonnes of paper gold. The new Cartel net short ratio is just 1.34:1. This means that they are now long 3 contracts for every four that they are short. Incredible!
Read the rest of it here at “24hr Gold” site