Gold COT Report 7/27/12: Cartel Reduces Net Gold Shorts By 2.25 Million Ounces!

Submitted by SD Contributor Marshall Swing:

GOLD COT REPORT 7/27/12

Commercials grabbed 3,878 longs and covered a massive -18,696 shorts to end the week with 55.81% of all open interest, a small decrease of about -0.29% from the previous week in total open interest, and now stand as a group at -13,624,500 ounces net short, a dramatic decrease of over -2,250,000 ounces net short from the previous week!

 

Large speculators sold off -14,389 longs while purchasing 1,593 shorts for a net long position of 11,297,700 ounces, a  decrease in their net long position of almost -1,600,000 ounces from the prior week.

The small speculators gave up -1,810 longs while purchasing 4,782 shorts for a net long position of 2,326,800 ounces a  decrease of over -650,000 ounces in their net long position from the prior week.

This was my quote from last week:

As in the silver COT, we see a marked difference in the strategy of the two speculators.  Here the smalls picked up a huge amount of longs.  Could they be following the lead from the silver side of the house that spot price has to rise next week as the commercials shake out the speculator’s silver shorts?

The smalls had picked up 1,713 longs in the prior reporting period and sold off just over that amount this period.  It appears they timed the long purchase and sell perfectly.  Notice in my silver report for this period, I am predicting price to fall as the result of a raid.  Things heated up too quickly over on the silver side as the commercials did not get the shorts laid in and now must do something to avoid losses.

What about the large speculators and their short game?  Well, two weeks ago they purchased 5,873 shorts and another 1,593 this week for a total of 7,466 minus this weeks 4,406 covered leaves 3,060 still out there into the price rise this week.  Did they have stops set or not is the question and how much did they lose is the answer.  To be continued next week…

For the small speculators who picked up 4,782 shorts, I have no pity.  Those shorts were held through the close of about $1575      and now the price is $1627.  Why did they think price would fall?

You decide!

Always for your convenience, if you would like to contact the CFTC and express your views to them, I have provided you their phone numbers and I hope earnestly that you fill up their phone lines: http://www.cftc.gov/Contact/index.htm and email addresses as well:

ggensler@cftc.gov  Chairman Gensler

bchilton@cftc.gov  Commissioner Chilton

jsommers@cftc.gov  Commissioner Sommers

Somalia@cftc.gov  Commissioner O’Malia

mwetjen@cftc.gov  Commissioner Wetjen

dmeister@cftc.gov  Director Meister

See you next week!