Gold COTs
cftc.gov
Non-commercials are the large specs (MUFUs hedge funds etc)
Non-reportables are the small specs
Commercials are the commercial
For the record, Commercials are not going to have to cover that short interest. Commercials are of two classes
1) those that produce gold.
2) those in the industry with a vested interest in it e.g. jewerly makers, industrial users, etc.
Even non-hedgers like NEM or GG are going to sell current production via futures. After having studied this mess for a long time, I see all this ranting about "cartels" and commercials that will be "forced" to cober if gold hits 325, 350, 375, 400 etc etc etc etc. Well DUH..... Nem is not going to be forced to buy back the gold it is selling each and every month that causes it to be short futures. Get real. As for commercial group #2, that group is long and can not be squeezed either.
Finally there is not much of a "Cartel" left when Barrick announces no more further hedging (selling forward), and JPM the other supposed "Cartel" member predicting the POG to be 415 by year end. If there was a "Cartel" led by Barrick and JPM, it has been busted. Now is there a "Cartel" led by central bankers? I leave that up to you to decide.
If you want to understand price action, perhaps look at Non-Commercials. Those are the big boys. The MUFUs or hedge funds that are long or short the stuff. They are long by 136,229 to 43,069 contracts. They increased their longs by 11,000 contracts. Who might get squeezed here? Well perhaps it is the idiot hedge funds that are short this stuff (the 43,000 contracts as well as another 26,000 contracts short by small spec idiots). That is where the action is IMO and those two groups are indeed subject to squeezes. Periodically you also see some hedge fund or MUFU (perhaps looking to buy more stuff lower), run stops to the downside, or someone else run stops to the upside.
In the meantime everybody and their brother is watching for that huge short interest in the "commercials" to be FORCED to cover when it is unlikely to ever happen. DOH!
I have not seen this analysis offered anywhere else by anyone, but I believe it fully explains why there is almost NO sustainable correlation between commercial short interest and POG other than periodic happenstance. PRODUCERS are not going to cover what they are trying to sell. They might (if short interest gets high enough in the MUFUs hold back sales if they do not like the prices they are getting but Producers in general are always going to be short).
JPM or Fidelity or whoever would not be a commercial, but a Large spec. I have no idea whether or not they are long or short, but in predicting a POG of 415 perhaps JPM is a late believer in the gold story.
Mish |
