Commitment of Traders Report: JP Morgan Still Short Silver Around 18,500 Contracts

This is an excerpt from Ed Steer’s Gold & Silver Daily Newsletter, with an overview of the most actual COMEX futures market positions:

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was more or less what Ted Butler and myself were expecting.

In silver, the Commercial net short position declined by 5,574 contracts, which works out to 27.9 million troy ounces.  The Commercial net short position is now down to 210.7 million troy ounces, which is still way up in nose bleed territory.

The Big 4 traders reduced their net short position by around 2,400 contracts, but the ‘5 through 8’ traders only reduced their short position by about 300 contracts.  The small traders, Ted Butler’s raptors, added about 2,900 contract to their long position.   Ted pegs JPMorgan’s short-side corner in the silver market at around 18,500 contracts.

On the other side of this were the hapless and brain-dead technical traders in the Managed Money category, as they sold 3,920 long contracts, but they also decreased their short position by 503 contracts as well, which Ted was happy to see.  The reason being that despite the ongoing engineered price decline during the reporting week, the Managed Money may have been pitching longs, but they weren’t adding to their short positions, which is a good sign that they may not be suckered into going mega short the silver market if JPMorgan tries to force them to go there.

In gold, the Commercial net short position declined by 8,057 contracts, or 805,700 troy ounces of the stuff.  The Commercial net short position now sits at 13.57 million troy ounces, which is still way too high to suit me.

The Big 4 traders reduced their short position by 2,200 contracts—and the ‘5 through 8’ traders did the same.  The smaller traders/raptors added 3,500 contracts to their long position.

In the Managed Money category of the Disaggregated COT Report, these technical funds sold 4,000 long contracts and also added 2,205 contracts to their short positions.

Ted mentioned that the technical funds in the Managed Money category are close to the point where they’ve sold all their accumulated long positions in both silver and gold—and unless “da boyz” can force these same traders further onto the short side, we may be at—or close to—a temporary bottom.  If that turns out to be the case, then a rally of some size may be in our future.

So we wait.

I want to spend a minute talking about what I call the “unblinking longs” in all four precious metals.  These are non-technical fund traders in the Managed Money category of the Disaggregated COT Report.   They do not respond to the usual buy/sell signals that drives the brain-dead technical funds in this same category.  They remain long through thick and thin—and the highs and the lows.  They holdvery large long positions.

In palladium, it’s north of 15,000 contracts, platinum it’s something over 25,000 contracts, in silver it’s a bit over 40,000 contract—which is an eye-watering number, by the way—and in gold it’s a bit north of 110,000 contracts.  These are not small numbers—and I’ve always asked myself who they might be—and what their reason for being there is.

I don’t know if this situation is good or bad, but they’re always there.  I expect that at some point in the future, we’ll find out.

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