Commercials sold off a mountain of longs this week -15,611 and picked up a huge 9,802 shorts to end the week with 54.88% of all open interest, more than a full percentage point drop since last week, and now stand as a group at -15,612,200 ounces net short, over 2,500,000 added net short from the previous week. This is the result of the speculators going long because they thought the bottom was in. But just like in silver, the bottom, of course, is not in yet and will not be in for quite some time to come. As we approach the fall of the Western financial system with JP Morgan leading the pack, the precious metals will plummet to unbelievable lows, just above or at capital expense costs per ounce. But this is a good thing for us physical investors.
No one believed me months ago when I predicted silver would tumble below $30 an ounce and gold below $1600. Don't think for a minute that the lows are in yet. Until the commercials divest themselves of their massive short positions they will continue to debase the metal's prices.
Large speculators grabbed 16,523 longs and covered -1,629 shorts for a net long position of 12,886,400 ounces, a big increase in their net long position of well over 1,800,000 ounces from the prior week. They were doing the right thing going long but as we shall see in next week's COT they got slammed by the commercials and gave up many of those longs.
Small speculators increased 5,382 longs and covered -1,879 shorts for a net long position of 2,725,800 ounces a significant increase of over 725,000 ounces net long from the prior week.
In recent weeks we have seen the producer/merchant commercials steal longs during the same COT week. This time is different as they waited several days after the massive long buying to attack the speculators and rob them of their longs by tripping their stops so they can continue to decrease their massive net short positions.
I will detail these events in a report on Sunday.
The battle with the CFTC and the manipulation of silver and gold is over for now and the speculators have lost but I will always provide the CFTC commissioner's access information for you so we can continue to remind them they work for us!
For your convenience, if you would like to contact the CFTC and express your views to them, I have provided you their phone numbers and I hope earnestly that you fill up their phone lines: http://www.cftc.gov/Contact/index.htm and email addresses as well:
firstname.lastname@example.org Chairman Gensler
email@example.com Commissioner Chilton
firstname.lastname@example.org Commissioner Sommers
Somalia@cftc.gov Commissioner O'Malia
email@example.com Commissioner Wetjen
firstname.lastname@example.org Director Meister
See you next week!