From TF Metals Report / Friday, April 20, 2012
The Turd humbly submits a short reading list for the weekend.
First of all, we should discuss the latest CoT. I was all excited to see the numbers and, instead, it’s mostly a non-event with no clear signals either way. Gold, as discussed here repeatedly, has seen its total OI fall under 400,000 which is down about 20% from the OI highs of late February. This past reporting week alone, total OI fell over 1% but the internals are kind of strange. Spec longs and Cartel longs both cut about 2,300 contracts while The Cartel short position increased by about 2,700. Interestingly, long and short small specs both fell by nearly 2,000. What the heck is going on here? Beat’s the living daylights out of me! Here’s the weirdest part: Large spec shorts declined by 7,648 or roughly 22%. It’s only one indicator but, on balance, this report does not indicate that gold is ready to explode higher. Maybe sometime soon but likely not yet.
In silver, the picture is equally confusing. In stark contrast to gold, the large specs did virtually nothing. The small specs though, who were busily dumping long and short positions in gold, were busily adding long and short positions in silver. Huh? Very strange. On top of this, the EE added long and short positions, too, though the longs addition was about twice the short addition in percentage terms, bringing the net short ratio down to 1.59:1. Again, in contrast to gold, total OI surged over 6% to 121,448, all while price for the period was essentially flat. Very, very strange.
I mean, it’s just weird. Total OI is the highest it has been all year but price is down $6 from its high. And, a month ago, silver OI was just 107,000 while price was roughly $32, right where it is today. So, why the tug-of-war? A 13% rise in OI while price is flat. Gonna have to think about this one for a while but something odd is going on. Just can’t put my finger on it yet.