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Gold COT (CFTC - Commitment of Traders) for Period 6/18-6/26/2012

Commercials picked up 4,917 longs and a covered a massive -14,614 shorts to end the week with 55.08% of all open interest, an decrease of about .5% from the previous week, and now stand as a group at -14,416,000 ounces net short, an huge decrease of almost 2,000,000 ounces net short from the previous week.

The swap dealers actually increased 5,217 longs while covering -5,720 shorts.

The producer merchant added 1,923 longs and covered a massive -6,671 shorts.

Large speculators coughed up -9,808 longs while picking up 3,981 shorts for a net long position of 12,261,900 ounces, a decrease in their net long position of just under 1,500,000 ounces from the prior week.

The smart small speculators held their ground and only forked over -532 longs but broke the piggy bank when grabbing 5,214 shorts for a net long position of 2,154,100 ounces an decrease of over 500,000 ounces in their net long positions from the prior week. Two weeks ago I stated "The small specs are holding those short positions ferociously". What we see now is the small speculators are determined to play the short game despite all odds being against them. There is, in fact, a way to play this game with the producer/merchant and it will be interesting to see how long the smalls hold these shorts.

Just realize one thing, it is always possible their shorts from 2-3 weeks ago were sold during the raids and these 5,214 new shorts are brand spanking new positions which also would mean there are actually many thousands more new small shorts because that would make the math balance. Most people, unless they follow the daily bulletins very closely do not realize there is a hidden world in these numbers that never sees the light of day except when compared to the intraday charts and daily bulletin. Knowing those factors is the only way to play short term in the future's markets.

This was my quote last week:

"Overall, what the commercials are setting up for, considering the action on Thursday, is to define whether or not the speculators will have the appetite to go long hoping against hope that a bottom is in and some fast money can be made. Expect there to be an HFT spike at some point Monday but more likely Tuesday or later to coax the specs back into the game. If that spike fails, then we will see considerably lower prices in the near future."

If you examine the uptick in spot price carefully, you will see there has been no resistance whatsoever from the producer merchant to bring the price back down. That means they are causing the price rise and it is a trap for the speculators. If there is not significant long buying on the part of the speculators, the producer/merchant will slam those new gains back into the concrete very quickly. The most suspicious part of the end of the week price rise was that it started in Asia. We almost never, ever see price change much in Asia during the off hours. Very suspicious, indeed.

As I repeat, every week, the goal of the producer/merchant commercials is to get out of their massive short positions because they know the hand writing on the wall now and see what is coming clearly. They continue to reposition their short positions to make their fall from grace as painless as possible.

One last thing I want to point out this week is the swap dealers are now net short only 28,800 ounces of the yellow metal. Compare that to just a week ago when they were short 1,122,500 ounces and two weeks ago when they were short 1,959,800 ounces.

Always 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:

ggensler@cftc.gov Chairman Gensler
bchilton@cftc.gov Commissioner Chilton
jsommers@cftc.gov Commissioner Sommers
Somalia@cftc.gov Commissioner O'Malia
mwetjen@cftc.gov Commissioner Wetjen
dmeister@cftc.gov Director Meister

Gold COT Report

See you next week!

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