In it, the Big 4 traders are short about 100 days of world silver production which is up about 4 days from the prior week’s report. The ‘5 through 8’ large traders are short an additional 36 days of world silver production…down about 1 day from the prior COT Report for a total of about 136 days that the Big 8 are short…up about 3 days from last week’s COT report. [In the prior reporting period they were short 133 days of world silver production.]
That 136 days that the Big 8 are short, represents a bit over four and a half months of world silver production, or 318.0 million troy ounces of paper silver held short by the Big 8.
In the COT Report above, the Commercial net short position in silver was reported by the CME Group at 216.3 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is 318.0 million troy ounces. So the short position of the Big 4/8 traders is larger than the total Commercial net short position by 318.0-216.3=101.7 million troy ounces…down 19.3 million troy ounces/3,860 COMEX contracts from last week’s report.
It was this long selling by the small commercial traders that had the mathematical effect of increasing the Commercial net short position in the COT Report above.
The reason for the difference in those numbers two paragraphs ago…as it always is…is that Ted’s raptors, the 29-odd small commercial traders other than the Big 8, are net long that amount…101.7 million troy ounces.
Another way of stating this [as I say every week in this spot] is that if you remove the Big 8 shorts from the commercial category, the remaining traders in the commercial category are mega net long the COMEX silver market. It’s the Big 8 against everyone else…a situation that has existed for almost five decades in silver, platinum and palladium — and now in gold as well.
As per the first paragraph above, the Big 4 traders in silver are short around 100 days of world silver production in total. That’s about 25 days of world silver production each, on average…up 1 day from last week’s COT Report. The four big traders in the ‘5 through 8’ category are short 36 days of world silver production in total, which is 9 days of world silver production each, on average…down a bit from last week’s COT Report.
The Big 8 commercial traders are short 45.7 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 44.1 percent they were short in last week’s COT report. And once whatever market-neutral spread trades are subtracted out, that percentage would be over the 50 percent mark. In gold, it’s 46.7 percent of the total COMEX open interest that the Big 8 are short, which is up a tiny amount from the 46.5 percent they were short in last week’s COT Report — and something approaching the 55 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 53 days of world gold production, down about 1 day from last week’s COT Report. The ‘5 through 8’ are short 29 days of world production — up about 1 day from last week’s report…for a total of 82 days of world gold production held short by the Big 8 — and obviously unchanged from the prior COT Report. Based on these numbers, the Big 4 in gold hold about 65 percent of the total short position held by the Big 8…down about 1 percentage point from the prior week’s COT Report.
The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 74, 76 and 65 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver is up about 2 percentage points from last week’s COT Report…platinum is about unchanged from a week ago — and palladium is down about 3 percentage points week-over-week.
As I keep saying month after month, the Big 4/8 traders are still hugely short in all four precious metals in the COMEX futures market. But it’s now mostly the Big 4…or probably just the Big 3…Citigroup, Bank America and HSBC — and the above chart tells you all you need to know about their current plight.
And as I mentioned in the COT discussion further up, the Big 8 traders increased their short positions again this week. Not by much, but an increase nonetheless. Their short positions in both silver and gold have been increasing for the last four weeks now, ever since the low ticks in both back on 09 August.
They’re stuck on the short side — and that’s for the very simple reason that the Managed Money traders are no longer willing to go mega short like they used to in the past.
The situation regarding the Big 4/8 shorts continues to be beyond obscene, twisted and grotesque…especially the Big 4 — and as Ted correctly points out ad nauseam, its resolution will be the sole determinant of precious metal prices going forward.