GOLD (COMEX) gold

Market Composition

Silver

The spec net short position in silver increased by 14k to 34.6k, the most so far, but it’s still all large specs. Small specs are long, however, net selling for the speculator class has been the feature for the past 5 weeks straight. A total of 45k contracts have been sold short. Large specs are short 49k, the most since May 2017. Small specs are long 14.4k, but that is the least long they have been in 2 months. Producers were short 1.47:1 and were net buyers. That’s the smallest short:long ratio the producers have had on since Aug 2017. Swap dealers are long 1.88:1 and were net buyers. That’s the largest long:short ratio for the swap dealers going back to Aug 2017 as well. So as you can see, it’s a market of extremes as far as positions go. Total open interest declined by 15k to 212.4k, the lowest in 7 weeks. Total open interest has fallen 31k in the past 2 weeks. You can take that to mean liquidation as the market traded lower. Total open interest is now 1.6% below the 6-month average. (Check out the chart of the gold/silver ratio on page 7. Gold has not been this far extended over silver since the 1990s. Could be time for silver to play “catch up.”

Gold

Specs sold again, raising their net short position to 76k, just under the peak short position of 79.6k two weeks ago. It was all large specs. They are short 82.7k. Small specs are long but only by 7k. That’s their smallest net long position since Feb 2016. Small specs were long gold by 28k four months ago and they have been slowly bringing that position down, but remain long. Producers were short 2.4:1 ad were net buyers. Swap dealers were long 1.67:1 and were net buyers as well. It was the swap dealers’ highest long:short ratio since August 2017. Total open interest declined by 6k to 473k, the least in 4 weeks. Total open interest is now 4% below the 6-month average.

Euro

Specs reduced their short position by 5.8k contracts. It’s the second week that they trimmed positions. They're the least short in a month but still heavily short and it’s all large specs. Small specs are long by 21.8k. Dealers are short by a ratio of 2.4:1 and were net sellers. That’s the highest short:long ratio of the dealers in 4 weeks. Asset managers are long 2.16:1 ad were net buyers. Total open interest fell by 1.5k to 528k. Total open interest is 2% above the 6-month average.

Aussie dollar

The spec short position increased by 311 contracts, not much, but still net short by 51k. Both large specs and small specs are short. Dealers are long 18.7:1 and were net buyers. Asset managers are short 5.9:1 and were net sellers. Total open interest increased by 15k to 156k. This is the highest open interest since the week ending May 15. It was the largest single-week increase since the week ending May 1. A big jump in open interest like this is indicative of high emotion. The Aussie could be nearing a bottom.