New Record on COMEX

The graph below (courtesy of ZeroHedge) tells the story grabbing headlines at present. Gold has joined silver in having the largest number of Managed Money (Hedge Fund) short COMEX contracts on record courtesy of the crafty Commercials/big Bullion Banks. They are now net short. For contrarians that is a screaming buy signal as we discussed previously.



COMEX analyst Ted Butler had this to say after the above was revealed on Saturday…

“I don’t have any reservation in speaking about gold in terms of COT [Commitment of Traders report issued by COMEX] market structure and on that basis alone, gold looks good to go higher from here. Like silver, it is very far advanced in establishing an important COT cycle bottom. Since there is no way to adequately predict in advance precise price bottoms and, especially, the maximum number of contracts to be positioned, the best anyone can do is hope to come close.

Instead of reminiscing over the past five years, an objective review of what transpired on the COMEX over the past two months should tell you all that matters in gold and silver. It has been the speculative selling of the equivalents of 10 million oz of gold and more than 250 million oz of silver (all arranged by the COMEX “commercials”) that has caused prices to drop. And it will be the unwinding of speculative short sales and new long positioning which will drive prices higher.

In fact, just as the maximum amount of attention and sentiment is set on lower prices, the focus should be on how high gold and silver prices will advance. That’s the important consideration at this point. The answer to that question, of course, lies with how aggressive the commercials will be in selling when the speculators get buy signals (courtesy of the commercial price riggers themselves). But the fact that managed money shorts are larger than they have ever been also means these traders have never been put in a more compromising position.”

If you look at the chart above you can see the lowest low beforehand was in late 2006. The chart below shows what happened immediately afterwards, and that is in essence what Ted Butler is talking about. The difference this time is the coil is wound far far tighter…

 

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@Ainslie Bullion

Are you an employee of Ainslie Bullion, a stockholder or do you own the company?

Chris

 

So Butler is at it again. This is the exact same speil he gave when JP Morgan had its supposed MASSIVE short position. When they unwind, there will be a huge short squeeze, blah, blah, blah. Didn't happen then, no reason to think he will be right now. He is just recycling his old rhetoric, he doesn't even have the decency to think up new rubbish.

It was absolutely comical how he explained why it didn't happen then. The joker claimed perfect manipulation as JP Morgan was but covering their short and buying at the same time,

If you think Ted Butler is anything more than a bought and paid for mouth piece for the Bullion indusry, you know very little about Bullion.

 

Hi Chris,
We're an employee and representative for Ainslie Bullion.

No buy/sell/ or trade discussion in normal forums. Also please do not quote the entire article unless you own the copyright, just a couple of lines and a URL. It is in the rules Thanks.

 

Thank you for your prompt response. No, I'm not interested in buying, but I do like to know who is posting information here.

Chris

 

Yup. Happy to chat to real peeps. Hoping you enjoy our news!

 

I enjoyed reading your opinion . I'm sure you've heard though opinions are like sphincters ,everyone has one . Some Just smell more due to the things they are fed or trying to feed.

 

simply explain to me as a true novice how this relates to what people think will happen. How in the world can such a prediction be made without knowing information about what impact it can or may have in our current economic condition.
I am really new to this and it just does not seem feasible or predictable, but hey I am here to learn so at the moment I am open to most any feedback and will proceed with common sense and caution.

 

Absolutely insane for their net position to be in the red. It wasn't that long ago that mainstream financial gurus suggested 5-10% of a portfolio should be in precious metals. If everyone did that I think we'd be looking at at least $100 silver and $5,000 gold.

 

It just says to me that even the Hedge funds, have thrown in the towel on holding physical gold. They see more and deeper pain in the future as far as they see it short ( no pun) term as hedge funds go. If they aren't buying it , why would we? Some may think we are smarter, and just know everyone in finance is crooked or plain dumb, but if the numbers are true, I would not be encouraging people with out money to lose, to buy precious metals, and if they know how to play with options, I would say sell down to the 5% mark and buy options to support your expectations

This statement would be true IF people started buying large amounts of gold or silver, but I think we know they are not doing so. If it continues to go down, those who buy here will be adding fire and profit for the funds and other banks to add more short and drive it down further. I don't place blame on the funds for shorting, I can not see how bullion sites and companies can encourage others to buy at this point. Using such a short graph "indicates" PM can't go lower. Sure strong hands!!!!

 

I think you can GREED, No Morals Etc., Etc, I actually find it very interesting that stackers trust no one EXCEPT the only guys that are actually trying to hose them. Its a strange World

 

Good point, facebook's market cap is worth about the equivalent of all above ground silver. Has a price to earnings ratio of 94 and no dividend. Hedge funds love facebook, sounds like a lot better place to put money than silver.

 

Duplicate.

 

Even if Butler is way wrong, that doesn't change the data which indicates one thing to me, that there has never needed to be this much downward pressure in gold to achieve its price point. That says one of two things; either that paper gold has never been this undervalued, or that demand has never been this high because it never required a net short position to drop the price as far as desired by the market makers. A short position isn't just a bet that the price will go down. It also creates downward price pressure.

For the full picture on what the COT is really doing, from notably biased yet unequivocally informed whistleblower Andrew Maguire:

http://www.kingworldnews.com/andrew...as-the-shorts-are-now-going-to-get-destroyed/

He is saying the same thing Ted Butler is saying, except he has a mountain of evidence, so there's no need to attack the messenger.

 

You got it all wrong. The MM's are certainly not targeting a "desired" price point. This is the kind of thinking that got the stackers in all kinds of trouble. The hedgies are now net short on Gold because why would anyone want to buy Gold in an improving economic environment, with a very strong and still strenghtening dollar, and rising interest rates on the way. It is that simple.

 

There is a huge problem with that, the 5-10% of a portfolio should only be considered if precious metals are trading at or about fair value. You are talking about a 5x premium, the financialy astute would be recommending dumping way way before you got to the levels you are speaking of. You are talking about a 5x plus premium over fair value. Only the same Bullion pumpers we saw the last time would be pushing metals at that valuation.

 

No actually you are wrong.

 

Care to defend that point??? I really do not see the flaw in my logic. I would be happy to debate it though if you could back up your statement with a little substance.

 

How about you defend the 5X fair value? Where are you getting this info from?

 

Through the time tested accepted method of how to value a commodity. It is measured against the cost of production. That is what they teach you at the univerisities and that is what works. There may be many extreme gyrations both above and below that price, but the production price is where the commodity will eventually gravitate towards. Is that not exactly what happened when Silver skyrocketed to almost $50???? Isn't that what happened to Gold??? (well almost, Gold is still a wee bit high) Fundementals always win out in the long run.