By Gene Arensberg
HOUSTON – You know that bearish gold call from Goldman Swaps Sachs on Thursday that helped push gold lower, albeit not really very much? Let's look at the action in gold and silver in hourly terms with the COT cutoffs shown to refresh the memory.
Just so everyone knows we all know the score, below is the near record high short positioning of the 18 traders who reported gold shorts and the 14 traders who reported silver shorts as Swap Dealers in the July 25 disaggregated commitments of traders report (DCOT) by the Commodity Futures Trading Commission (CFTC).
164,723 Swap Dealer gold shorts.
56,853 Swap Dealer shorts silver. An obscenely high number of shorts controlled by only 14 traders. That's 4,060 shorts per Swap Dealer if divided equally.*
Looking at those graphs and seeing just how way overly short the Swap Dealers are on both gold and silver, is it any wonder that Goldman is still trying to jack-jaw the markets lower?
More importantly, given that Goldman has been whipping the same horse - even the same target number - for more than a year now, is it any surprise that the other trading participants, such as The Funds (Managed Money) are not being intimidated by the Goldman spin?
The Swap Dealers are becoming more and more isolated - and we think that equates to more vulnerable - by the hour.
We may have more on this topic shortly. We may even add to this message by Sunday evening. Stay tuned.
Saturday 09:50, dropping a daily gold chart in for reference.
* More math on the Swap Dealer silver shorts.
4,060 shorts for each of the 14 Swap Dealers is equivalent to 20.3 million ounces of silver, which equates to about $426 million notional per trader.
56,853 total shorts for the Swap Dealers as a group is just under the record set July 8, (58,381 shorts) which was far and away the highest ever in the DCOT dataset (data back to 2006).
58,381 shorts is a lot of pent up buying power, as we are virtually certain the Swap Dealers do not have metal to deliver into these shorts - thus they must be covered.
58,381 shorts is equivalent to 292 million ounces or about $6.1 billion (controlled by 14 traders!).