Gold & Silver – Traders Positions At The End Of Q1

The latest Commitment of Traders Report of this month is out. It shows a very interesting evolution in gold: total open interest has decreased significantly. The following chart (courtesy: GoldSeek) shows how this decrease is due to significantly lower speculative positions, both long and short. At the same time, the commercials have decreased their short positions slightly (rather insignificant) but increased their long positions.

COT_Gold_29_march_2013

When we compare today’s positions in gold, and compare it with some key moments in the past year (February 19th, 2013 in the midst of historic negativity vis-à-vis the metals | October 2nd, 2012 at the end of the 2 month rally of gold | August 14th, 2012 at the start of the summer rally) we see comparable readings with the summer of 2012. (source) The speculative positions are only higher, but the length is comparable.

Gold looks bullish on the short term. It does not necessarily mean that a price rally will start right away. It means that a rally is likely, and that support should hold (if no major change in the positions takes place).

The picture in silver looks rather unchanged. The open interest did not change, but commercials accumulated additional short positions while long large speculators decreased and long small speculators increased with a comparable amount.

COT_Silver_29_march_2013

When comparing today’s readings with the same important moments in the past 12 months as shown for gold, the picture is different today. In the following tables, the open interest is 155,353 in the first table; 139,117 in the second table; 127,776 in the third table. So today’s situation in silver is characterized by a high open interest due to high speculative short positions and high commercial long positions. The one characteristic about speculators is that they can quickly change their mind and cover their shorts. The high number of open interest remains an important point of attention though.

In closing, we point to the latest US Mint figures: 3,356,500 ounces of silver were sold in March 2013. One needs to replace the latest figure in the table below which we published a week ago (source), and it is clear how many ounces of silver have been bought in the past week. 2013 is an astonishing year when it comes to US Mint Silver coins; it beats all previous records in the first quarter.

Update (April 2nd): We just published a great article “The Great Disconnect Between Paper & Physical Silver” which is a must-read for everyone interested or invested in silver.

Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing