CoTs: the silver CoT through Tuesday showed open interest backing off slightly to 185,716. There was a nearly equal but small reduction in large and small specs longs and shorts. The attacks through Friday brought this back to 189,203. The extreme naked short positions of the specs versus the commercials has shattered records going back decades. And remember, paper Crimex contracts are leveraged 30 to 1, so won't take much to trip this “trade” up.
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More happened in paper gold futures as the attack is more aggressive lately. Open interest is expanding and was 462,664 on Tuesday with POG $21 higher. At this point the report indicates the large and small specs reduced their longs rather than increased their shorts. The commercial swap dealers reduced shorts further going into a never before seen net long position. This shows the managed money slingers' position on Tuesday before the “rest of the attack”.
chart source: Gold Money
The trigger for a rally could be a producer or two simply covering some short hedges. That really wouldn't require big cojones or even taking one for the team to perform. It would be the smart thing to do.
By Friday the short attack renewed as OI surged to 475,596. As far as the positions: they are now even more extreme, very extreme, and leveraged. I guess records are made to be broken.
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Elsewhere in the broken record department of real demand: gold coin sales at the US Mint are very strong, already exceeding previous entire months.
As far as China's “reserve announcement,” where is Waldo? Very large quantities of gold have entered that country especially in the last couple of years. It has not been re-exported back out. Who has it? Where did it go? Almost all the analysts are shaking their heads in disbelief.
Meanwhile the latest figure out of the SGE for the week ended July 10th hit 62 tonnes – the eight largest weekly total ever – at a time of year when SGE withdrawals are usually at the 20-30 tonne level. This brings the SGE total for the half year to date to 1,191 tonnes. And the total reserve build over six years was 604 tonnes? Really? Yes folks, someone is messing with us, enough said.
