COT report shows commercials now net long silver
cohodk
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I don't think I've ever seen commercials being net long. Is there any significance?
Roadrunner?
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Knowledge is the enemy of fear
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Link explaining what the COT report is-
https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm
Links to a couple of silver COT charts:
http://news.goldseek.com/COT/1536348350.php
https://www.investing.com/economic-calendar/cftc-silver-speculative-positions-1621
Interesting, thanks for the information !!!
hedging their physical inventory from further declines?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
hedging their physical inventory from further declines.
Wouldn't they be shorting silver in order to hedge their physical inventory from declines?
I knew it would happen.
or buying longs to hold the price up. I should have used the word "protecting" in lieu of "hedging."
Price stabilization/protection from price volatility for producers and large consumers is the reason there is a futures exchange for commodities. Speculators join in for profits, only to increase the volatility.
A net long commercial position may indicate the commercial producers are trying to wrestle price control from the speculators. A commodity exchange would better serve the producers and large consumers of a commodity if speculators were kept off the playing field.
While producers (i.e. the corn farmer) want a higher price and large consumers (i.e. the cereal manufacturer) want a lower price a net long commercial position is positive for the price of the commodity. It indicates the producers desire/believe in a higher price.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The Commercials are now net long silver by 14,613 contracts while the Speculators are net short by 25,000 contacts, another record. What this chart is telling me is that silver is so FAR off the RADAR that Commercials are now becoming bullish while the Speculators are becoming bearish. This is quite a change as the Speculators were net long silver by 50,000 contracts just three months ago.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So, who exactly are the commercials?
Knowledge is the enemy of fear
Hedge goes both ways. Most is done on WIP to avoid loss between sales. Hedging all stock could break the bank.
Best place to buy !
Bronze Associate member
Entities involved in the production, processing or merchandising of silver. Specific identities not readily available. I would guess it includes miners and large bullion houses and those acting on their behalf. It could include anyone having an interest in stable silver prices.
From SeekingAlpha:
"Commercial traders' actions are driven by their business plans. Silver miners hedge their anticipated production by selling futures contracts while silver processors buy futures contracts to ensure a steady supply of raw material. Historically, the net commercial position has been dominated by the producers' hedging of anticipated output. Therefore, the net commercial position has always remained in negative territory. This is one of the reasons we track commercial traders' momentum, rather than the sum of their positions. More importantly, recent processor purchases have threatened to upset this relationship and push us into unknown territory. Silver processors are clamoring for raw material before prices rise."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I believe what is equally important is that we are now seeing the speculators net short. Historically the commercials and the speculators place opposing "bets" with the speculator bet determining price direction. While commercial producers seek higher spot prices and commercial consumers seek lower spot prices (the battle among commercials for price discovery) , I suspect that spot has been driven to the point by the speculators that it is now threatening to make production unprofitable for the commercial producers and make sales of the final product (that are after all based on current spot) unprofitable for the commercial consumers. Yes, the commercial consumers want to pay the lowest price for their raw material, but when that price (spot) dictates what their final product sells for they have an interest in keeping a floor on that price.
I suspect the commercials, both producers and consumers, have said "enough," and joined forces with long positions to fight the speculator driven spot price. As long as JPM is in the speculating business, the commercials are fighting a lost cause. Is JPM attempting to shut down or even take control of the miners? It could prove to be very profitable for JPM.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Great reading.
IDK
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Very interesting read, thanks
Successful Trades: Swampboy,
All Banks are Commercials, but not all Commercials are Banks
"But a cycle of higher prices will only begin with a spark from a falling dollar, falling interest rates or a stronger yuan. Expecting a rally simply because of CoT positioning—or an alleged Bank long position—is not only wishful thinking, it simply isn't based in reality... at least as stated within the actual, CFTC-generated reports."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Why cant higher prices be the result of strong demand? I thought JPM was buying it? Maybe there really hasnt been any demand?
Knowledge is the enemy of fear
silver price discovery is determined by the paper market's supply and demand where supply is pretty much unlimited. Supply and demand of physical silver only affects premiums over the paper market's spot price. Note how the recent exhaustion of the Mint's ASE supply did not light a price surge.
Prices will be higher when paper longs trump paper shorts. Doesn't matter if it's the commercials are the speculators, net long vs. net short determines price direction. The "spark from a falling dollar, falling interest rates or a stronger yuan" will continue to be the price motivator.
JPM controls the size of it's stack with physical purchases. It controls the price it pays (and eventually sells for) in the futures paper market. Was a time when speculators were fined/prosecuted for such activity. Guess the Hunts didn't grease the right palms.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So physical demand is meaningless?
Knowledge is the enemy of fear
Until the COMEX blows up (can't make deliveries) or the CTFC starts doing its job. Gonna be a while. Hopefully those pulling the paper price strings will first decide to call it a day and cash in their physical holdings at a very high price.
The salvation lies in the fact that the COMEX sells paper up to 100 times the actual bars it holds (fractional COMEXing). There have been reports last couple of years of COMEX having to make high cash payouts to satisfy unfulfillable physical deliveries.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
99% of the time its meaningless . In actually its controlled by the GSR !!! If it hits the magic ratio BLAMM POW too the moon Alice
There have been reports last couple of years of COMEX having to make high cash payouts to satisfy unfulfillable physical deliveries.
Any evidence of this or just hearsay?
Knowledge is the enemy of fear
use of the obscurely defined EFPs (Exchange for Physicals) and PNTs (Privately Negotiated Transactions) in the settlement of Comex gold and silver futures contracts
The numbers don't lie
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The 2016 U.S. presidential election was never intended to be an election. Instead, it was a Deep State charade designed to pass the presidential baton from Obama to Clinton. Obama’s reign was an unprecedented financial bonanza for his Deep State handlers, and they were poised to go in for the looting kill upon the second White House coming of the epically money motivated Clintons
This is your link? WTF man? LMFAO!!!!
Knowledge is the enemy of fear
No kidding?!?
Something True in a derryb link?
Unprecedented!
Liberty: Parent of Science & Industry
This is my link:
"Most gold market observers believe that EFPs are a Comex gimmick designed to prevent, or at least forestall a formal Comex delivery failure."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Gold and silver spot (futures) control the GSR. GSR controls nothing but decisions on which to buy, which to sell.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Most gold market observers are arrogant ignoramouses who are incapable of logical and rational thought and continually place blame for their lack of success and performance in manipulation and conspiracy theory.
Knowledge is the enemy of fear
I could've sworn that in a recent web interview, I believe it was with David Morgan, he was saying that the commercials in the COT Report are the 8 largest bullion banks. I'll have to go double-check.
Most gold market observers are arrogant ignoramouses who are incapable of logical and rational thought and continually place blame for their lack of success and performance in manipulation and conspiracy theory.
Most financial "experts" are commission-driven. Their motives are not always so pure and they have their own set of biases about markets. Let's talk about HFT and the lengths that the trading houses go to in order to shadow their own client's holdings, search for groupings of stop loss set points and to juke the system with their program trading.
I knew it would happen.
The metals market is not exempt from TBTF bank manipulations.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Well i sure wish you would be right and it goes up and i can sell this useless shiny bulky rocks and buy a swimming pool of my own!
Liberty: Parent of Science & Industry
Yup....typical deflection.
Knowledge is the enemy of fear
typical deflection
Valid, and on point!
I knew it would happen.
Let's talk about HFT and the lengths that the trading houses go to in order to shadow their own client's holdings,
Sure...go ahead. Talk. I'm anxious to read your discoveries.
Knowledge is the enemy of fear