-- Posted Friday, 30 April 2010 | | Source: GoldSeek.com
By: Gene Arensberg
COT report issued today, Friday, April 30, 2010 at 15:30.
Bottom line: COMEX commercials’ increase short bets for both gold and silver, but not aggressively. Gold +2.4% and the gold LCNS +3.2%. Silver +1.9% and the silver LCNS 3.9%. Details just below.
HOUSTON -- First, just to follow up on our coverage of the gold/silver ratio (GSR), we noted that the GSR did indeed snap back lower yesterday (Thursday) as shown in the short-term graph below. On Wednesday the GSR remained above 64 ounces of silver to “buy” one ounce of gold metal. Silver finally “answered” gold’s move higher on Thursday, however, and the GSR came back in to 63.12.
We view the snap lower of the GSR as more bullish than bearish short term. As we write this, the GSR looks to be heading for a close similar to yesterday with gold trading near $1,179 and silver in the low $18.60s – or something like 63.20 on the GSR.
Gold COT
The Commodities Futures Trading Commission (CFTC) issued its weekly commitments of traders (COT) report at 15:30 ET today, Friday, April 30, 2010. The report is for the close of trading as of Tuesday, April 27.
GotGoldReport.com is focused on the changes in positioning of the largest futures traders in that report – the traders the CFTC classes as “commercial.” We refer to those commercial traders as “LCs” for “Large Commercials.”
For gold, as gold popped a net $27.59 or 2.4% to $1,168.15 COT reporting Tues/Tues, COMEX commercial traders increased their combined collective net short positioning (LCNS) by 8,126 contracts or 3.2% from 257,396 to 265,522 contracts net short as the open interest rose a larger 17,253 contracts from 521,338 to 538,591 contracts open.
Remember that is as of the Tuesday close, which coincided with the trading chaos of futures and options expiry. Gold printed the low for the week that day at $1,146.67 before the influence of strong, possibly Asian and European bidding later in the day.
Here's the nominal LCNS graph for gold futures:
At this level, an increase of 8,000 contracts is not all that much of an increase in the net short positioning of the LCs. Notice, please, that the increase in the LCNS is less than half the increase in the open interest.
When compared to all contracts open, the relative commercial net short positioning (LCNS:TO - the most important graph we track) shows virtually no change as the LCNS.TO comes in at 49.30% versus last week’s 49.37% of all COMEX contracts open. The LCNS:TO shows neither aggressive selling nor short covering in this report in other words.
Here's the LCNS:TO graph for gold:
Once again, we do not see evidence of either aggressive short covering or the opposite, a surge in commercial “hedging”. (We use the term “hedging” loosely because the CFTC does.)
Pending our review of the data this weekend we are very likely to raise our short-term trading stops for gold to either the $1,130s or to $1,147 (this week’s low). We will decide which as we work through the charts, ratios and data we update each weekend and report our findings in the linked graphs. More about that in just a moment.
The above is an excerpt of the full Got Gold Report web log update. To continue reading please click on this link:
And thank you for doing so.
A land developer, professional numismatist, self-taught bullion trader and investor since 1980, Gene Arensberg analyzes technical and fundamental developments in the precious metals markets. In 2000 Gene started sharing his own market research with fellow traders and fund managers. Those email reports evolved into his popular Got Gold Report, a biweekly look at important indicators for gold and silver published on the web. Gene’s more in-depth market reports, insights and trading ideas are available at www.GotGoldReport.com.
-- Posted Friday, 30 April 2010 | Digg This Article
| Source: GoldSeek.com
