Managed Money Shorts Gold and Silver

The gold and silver price may have hit a new low as predicted due to lower premiums and bad COT reports (managed money shorts were very low). But today I have better news.

According to the COT report the managed money shorts have all come back again and will support a higher price. So it is a good time to buy precious metals right now.

 

  

SGE withdrawals are robust, so there is Chinese demand although not too much. U.S. Mint sales are robust but not as high as in Q3. Premiums at APMEX are given below.

Premiums are back at their historic average, but still elevated.

 

  

Premiums in China are very high for silver, but not so high for gold.

 

Managed Money Short Update: Gold/Silver

What is very surprising this week is that gold and silver managed to go up, while no short covering has taken place. So we are seeing shorters trying to keep the gold/silver price down and not succeeding in it. This is a very bullish sign for precious metals as the real short squeeze is still to come. Currently we are seeing a rally in the precious metals market based on fundamentals and not solely on short covering. Probably some of the hot money in stocks went into gold during the stock market sell-off.

The COT report also confirms from last week that the bottom is in as large commercials have positioned themselves on the long side. In particular, silver still has a long way to rally.

On the premium side, nothing special is happening, still record silver premiums of 14% at Shanghai.

Junk silver premiums still at new plateau of 9%.

The next 3 weeks, the blog will be a bit quiet as I’m going to Hong Kong (to report on the protestors).

COT Shows That Gold and Silver Prices Have Peaked Out in Short Term

Looks like the chances of lower gold and silver prices next week is very high.

Look at all those commercial shorts piling up. The banks are trying to get a lid on the rising gold/silver price.

 

Managed money shorts (red chart) have covered their shorts, while the gold/silver price (blue chart) is peaking.

Horrible Silver COT Report

There is something interesting going on in silver.

Ever since we saw a little bit of a short squeeze in silver, the shorters have almost all departed and the large commercials are now heavily short silver.

Also, the silver premiums in Shanghai have come down dramatically.

I would watch out if I were you, I wouldn’t buy silver at this moment.

Managed Money Short Positions: Predicting Short Squeezes in Gold and Silver

What do we look at when we want to know if there will be a short squeeze to the upside in gold and silver?

Well, we look at the managed money short positions. These are the hedge funds and commodity trading advisors (CTA’s). If these people go short, then the price goes down and when the get long again, the price goes up.

You can find all info on the COT report site.

For example, the chart (May 28 2014) below indicates that there are a record amount of silver shorts at this moment. Each peak in the blue chart marks a bottom in silver price. So at least we will see some sort of price spike in the coming weeks in silver, when these hedge funds go long again from a record short positioning. This chart confirms to me that silver is cheap at this moment and it confirms why the premiums on silver are so high at this moment, while U.S. mint sales of silver outstrip the gold sales.

Managed money short positions silver

You can always find the latest numbers here. The latest managed money short number is 38453 shorts, which is a record high number of silver shorts, even higher than in the chart above. There is potential for a good short squeeze.

Silver COT report

As for gold, the last chart I could find is from March 2014. But you can always find the latest numbers here.

Managed Money Short Positions Gold

The latest number for the managed money gold shorts is 53577. If you compare that to the chart above, that’s also a pretty high number. So again, there is a potential for a short squeeze a few weeks from now.

Gold COT report

So now you will have another report to look at. This will at least give you the tools necessary to predict sudden gold/silver price spikes.

Silver About to Reverse in Price

According to the COT report for silver, the open interest in silver came down dramatically this week:
http://katchum.blogspot.be/2013/05/cot-report-goldsilver.html

That means the silver price is likely to reverse to the upside. Also, commercial shorts have almost all been covered now.

According to the COMEX report for silver, J.P. Morgan doubled its registered inventories from eligible silver, meaning that total silver stock is likely to go down. This confirms the COT report’s drop in open interest.
http://katchum.blogspot.be/2013/04/gold-and-silver-comex-stock.html

COT Report Gold/Silver

This page is created to monitor the COT report for gold and silver

Whenever the commercials turn long (purple bars go up), the price will bottom out and vice versa.

Open interest (green line) indicates the direction of the price:

   – When the price declines and the open interest increases: the silver price will keep falling.

   – When the price rises and the open interest increases: the silver price will keep increasing.

   – When the price declines and the open interest decreases: the silver price will reverse to the upside. 

   – When the price rises and the open interest decreases: the silver price will reverse to the downside.

Chart 1: COT Gold

Chart 2: COT Silver

Open Interest explained here by BrotherJohnF:

Copper Contango Theory: Copper Bottoming Out?

It looks like the contango is steepening again, so that means that the price will likely go down. But the red chart seems to be topping out while the copper price seems to bottom out…

Chart 1: Copper Contango Vs. Copper Price

The COT report though is very bullish, so copper could go up in the future.

Chart 2: COT report Copper

Although the technicals are bullish, the fundamentals are very bearish. First we have the Chinese GDP below estimates. We have IMF GDP growth revisions to the downside. Record stock levels for copper. Stock markets on the verge of collapse.

We have a lot of contradictory indicators.

Nice Site to get Current COT Reports

I always thought by myself, how come the COT site doesn’t give current charts and current tables here. I mean, those numbers are 2 months old… Because of that, I didn’t have current information. But we have a breakthrough here.

Thanks to Dieuwer from Seekingalpha, who pointed out I make a lot of mistakes, I now have a very interesting site to share. Namely: http://www.cotpricecharts.com/commitmentscurrent/

On that site, the two most important ones for me are the one for silver/gold and the other for 10 year bonds.

Gold: http://snalaska.com/cot/current/charts/GC.png
Silver: http://snalaska.com/cot/current/charts/SI.png
10 year bonds: http://snalaska.com/cot/current/charts/TY.png

Let’s talk about the silver one first. Chart 1 gives us immediately the commercial interest. And we see that today the commercials are pretty short silver. That means that silver will be weak at this time.

Once the commercials start to become long again (purple chart goes up), like in July of 2012, then you need to start buying silver. And indeed, when you look at the silver price in July 2012, it bottomed out. So this COT site, is a must, to monitor each week.

Chart 1: Silver Open Interest

Chart 2: Silver price

As for the 10 year bonds, Chart 3 gives us an idea what the commercials are doing now. They have gone long just recently. You can see the purple chart has gone positive the previous week. How to read this chart? When the purple chart is very positive, with many commercials buying bonds, like in April 2012, then you should buy bonds. When commercials are short, like in October-December 2012, you should sell bonds.
And it works like candy…

Chart 3: 10 Year Treasuries Open Interest

Chart 4: 10 Year Treasury Yields

It’s like Dieuwer has just put money in my pocket with these charts!