Political Metals

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Gene Arensberg of GotGoldReport just released a chart and commentary about the latest commitments of traders (COT) data from CFTC . Here’s the chart and the key points:-

• Stunning drop in the Large Commercials Net Short (LCNS) position for gold & silver. Large Commercials are mainly the bullion banks and their Net Short positions are their bets that silver prices will go down in the future. They covered their shorts (reduced their bets) by 16,446 contracts, equivalent to 82M oz of silver (paper silver, that is).
• This low level of LCNS position was last seen during the heat of the 2008 Panic.
• Total Commitment of Traders (COT) also fell sharply. This reflects a big overall reduction of open futures contracts (bets) on the price of silver.
• Conclusion by GGR: “We can say that as of Tuesday, the largest, best funded and presumably the best informed commercial traders of silver futures had taken the price downdraft opportunity to very strongly reduce their short bets for the second most popular precious metal. “

Note: Cut off date for the above data is Tue 20 Sep to Tue 27 Sep, covering the drastic price actions in the boxed area.