flash spécial open interest gold

**marie** Skipper Inscription : 05/02/2005 Messages : 20140

aprés un nouveau record de plus haut de 425688 contrats, le ma 29 mai 2007,
la séance comex de mercredi 30 mai provoque une baisse colossale de 55.000 contrats ( 166 T ), du jamais vu !!!..
et seulement une baisse du spot de 4.10 $...

le tout ne sera pas visible ds le COT publié demain, mais seulement la semaine prochaine ...

en attendt plusieurs hypothéses sont possibles ... source midas:

the gold open interest was just released and the drop was more astonishing than the recent increases. It fell a super astounding 55, 132 contracts to 370,556. HUH????? That is more than double a drop as I can ever recall. June fell 31,120 to 20,524, still high.
Either these numbers have been, and/or are all screwed up, or throw out a major aspect of my gold analysis of the past week, which I just extolled myself for.
What the heck is going on here and what does it mean? Let me give it a shot, but you might have throw this one out too, by Friday.
Whomever or whatevers, who were long, were ALL were flushed out yesterday at THE BOTTOM of the orchestrated takedown by The Gold Cartel, at least the bottom for the moment. Talk about the ultimate throw up.
Could this be The Gold Cartel’s last hurrah for the time being … i. e., they gave it their best shot with all the central bank gold they could muster and now must retreat again as continued demand is too much for them? Time will tell.

...........

Yesterday’s soggy $4.10 loss masked something momentous. Combined CBOT volume was the equivalent of 42,476 Comex, with open interest adding 1,554 NY contracts, while NY recorded gross volume of 186,674, with open interest plummeting a mind-numbing 55,312 contracts -13%. In aggregate, US futures therefore shed an astonishing 166.6 tonnes of open interest.
Today’s $7.40 gain was the fruit of continuous upward pressure, punctuated by selling forays. Volume was not huge: 68,099 in NY and 30,258 NY equivalent in Chicago.

ici l'auteur envisage qu'une tres importante transaction de physique ait été faite, mercredi du style de celle de tout début 1993, vente BC hollandaise... si c'est ça .. on devrait donc avoir une annonce à venir .. et regardez bien le graphe de 1993 ... héhé

Most observers are bewildered by the open interest slump. My guess is that this is the reverberations of the settlement of some monster physical transaction. One remembers how the Dutch sale announcement in early ’93 immediately preceded the dramatic move of that year.

pour mémo, graphe gold de la période concernée , ici

Marie
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flash spécial open interest gold Sign-m10

flash spécial open interest gold Sign-m10

**marie** Skipper Inscription : 05/02/2005 Messages : 20140

bon .... on a déja une vente de 37 T annoncée A POSTERIORI par la BCE pour ces 2 derniers mois .. ça fait tjs ça de moins au 166T lachées mercredi ...

par ailleurs BCE annonce qu'elle a vendu 60 T pour la 3eme année wag 2 se terminant en sept 2007 et qu'elle ne compte pas en vendre d'avantage ..

PRESS RELEASE
1 June 2007 - The ECB’s gold sales
Over the past two months, the European Central Bank (ECB) has conducted gold sales amounting to 37 tons of gold.

These sales are in full conformity with the Central Banks’ Gold Agreement, dated 27 September 2004, of which the ECB is a signatory.

Together with the gold sales of 23 tons, completed on 30 November 2006, the ECB has thus sold 60 tons of gold in the third year of the agreement, which started on 27 September 2006 and ends on 26 September 2007.

It is not the ECB’s intention to sell more gold in the current year of the agreement.

quoiqu'il en soit .. la derniére fois qu'on a eu semblable contraction de l'open interest était le 30 aout 2005, suivi d'un rallye de 64% en 9 mois tchin

source midas

A very astute observer points out that the last comparable open interest contraction, August 30 2005 was followed by a 9 month, 64% rally. It ended the 9 month period of range trading with the November 2004 $456 peak as the high water mark. Gold could be said to have been range trading for the past year…

Marie
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flash spécial open interest gold Sign-m10

**marie** Skipper Inscription : 05/02/2005 Messages : 20140

le commentaire gold de Norcini de cette semaine est un truc à lire absolument chinois

http://www.jsmineset.com/home.asp

en essence ça recoupe ++++ ce que disait Butler l'autre jour ( les raptors ).. changement de la structure des cots et notamment chez les commerciaux longs ...
Norcini range ds la catégorie commerciaux longs, les utilisateurs industriels ET les fonds institutionnels ... et ds ce cas en effet ça devient tout à fait clair !

Dear CIGAs,
I wanted to make a special notation to describe what has been happening in the gold market based on the Commitment of Traders reports from this week. I had expected to see the funds reducing their longs and increasing their shorts with the commercials adding new longs and also reducing their short exposure. I also expected the spreaders to increase their exposure as well. We got some of this with the fund long liquidation that occurred, the increase by the commercials on the long side and a pretty sizeable further build in the spreader’s category. What surprised me this week was to have seen the funds covering shorts last week with the bullion banks (the gold perma-shorts) actually INCREASING their short exposure. I found the latter quite odd to say the least since the bullion banks typically do not sell the market down on weakness. They did this time around. While the commercial NET SHORT position actually decreased, it WAS NOT because the bullion banks were buying and covering shorts. They did not. Rather they increased the size of their short position. Granted, some of that may have occurred on Tuesday of this week when gold staged what looked like the beginning of a nice rally only to fade dramatically by day’s end. But it is still odd to see this taking place at such low levels in the gold price.
I think a bit of explanation might therefore be a bit helpful regarding this development. Let’s begin with the commercial category. It is evident that what has been transpiring is a wholesale change of hands between the trend following hedge funds and the giant index funds who bought like mad last week along with some commercial end users. They added a whopping 8,483 brand new long positions, eating up all that the funds were throwing away and then some. That “some” was the selling by the bullion banks. My view of this is that this is quite significant for reasons I have repeated many times before on the pages of this site – these giant index funds are LONG TERM oriented players who do not quickly reverse positions nor trade in and out of the market flipping from long to short and back to long again as the hedge funds are prone to do. These funds exist for the benefit of their clients who want long term investment exposure to the commodity world and are more than content to sit and take a position and then wait for the inexorable trend to develop. This is very positive for the gold market.
The other point of mention is the spreaders category. I have been calling attention to this for the past few weeks and have commented that they are part of the reason that the open interest has continued to increase on the way down instead of contracting as we have typically seen in times past. As of last Tuesday, the spreaders category held over 25% of the total open interest and had built a RECORD large position. That is nothing to sneeze at and when they reach this sort of size, their actions have significant implications for the market.
To give you a bit of perspective let’s go back to the last week of April when the gold price peaked and look at what has happened among the traders since then. The funds have dropped 35,299 longs. During that same period they added a mere 3,646 new shorts. The commercials on the other hand, over that same period, added a MASSIVE 35,778 new longs while reducing only 17,300 of their shorts. As you can see, my contention that there has been a giant transfer of ownership from the hedge funds to the index funds is pretty much validated by the numbers. The addition of such a small number of new short positions by the funds (3,646) goes nowhere near explaining the build in open interest that has occurred during the recent leg down. It has been mainly the addition of new longs by index funds and other end users along with the addition of 21,951 new positions put on by the spreaders over the same period that accounts for a goodly portion of the open interest build.
Not to ignore the small speculators better known as the public, they too were busy adding but they have been busy adding NEW SHORTS. During this same period the small specs reduced their longs by a meager 130 contracts. They did not run on the price break like the big hedge funds did. What they did do however and what cost them dearly is that they piled on an impressive 14,003 new short positions the vast bulk of that coming in the last two weeks as gold plumbed its depths. Talk about selling the bottom of a market!
Here is a table that details what has occurred so that you can get a visual on all this number talk.

flash spécial open interest gold 54610_CommentaryChart

When you look at the data in this format it is very easy to see where the open interest build came from. The fund liquidation that occurred was completely absorbed by the index funds while the public and hedge funds basically ended up selling to the bullion banks. The spreaders are therefore mainly responsible for the increase in open interest as the price descended.
It is my view that the massive open interest drop we witnessed this past Wednesday was a result of the departure of a large number of spreaders for the reasons I have already outlined in my midday commentary of today. There is no doubt that some of these well connected traders got wind of the ECB announcement and proceeded to act accordingly.
What will be particularly interesting to see in next week’s COT report will be the actions of the commercial shorts, aka, the bullion banks. Will they have reverted to their standard selling as the price rallied this week or will they have actually covered some of their shorts? We shall see.

Click here for part one of this week's action in Gold, the US Dollar, the Canadian Dollar, and several other significant areas with commentary from Trader Dan Norcini

sur les spreaders:
Norcini les range dans la catégorie des investisseurs fondamentalistes ( au contraire des techs funds ) et pense qu'ils sont responsables de la décrue ++ de l'open interest de mercredi 30 ...à savoir qu'ils ont agi sur la nouvelle de fin de vente gold par BCE

Open interest numbers continue to drop off as a very large number of spread positions are being lifted. We are now back to levels seen in early April of this year. We will see the reduction in the spreaders category next Friday in the COT report so make a mental note of that since their departure took place on Wednesday and Thursday of this week and missed the Tuesday cut off date for the report. My own view on this is that the substantial open interest reduction at this point in time is probably related to the ECB news that came out this morning and the spreaders had already picked up on that. Those who spread markets for a living are the most sophisticated traders out there since to do so requires an in-depth knowledge of the particular market that the vast majority of traders do not possess. It is a fact that the majority of players in today’s futures markets are joined at the hip with technical analysis and system trading. That requires ZERO knowledge of the fundamentals of the market that they are trading. Most of them really, to be perfectly honest, do not care about the fundamentals since TA gospel is that the fundamentals are revealed in the price. That is not the mindset of spreaders. They work the market based on fundamentals and track such esoteric things as the basis and spread relationships between near and distant contracts. Some of them are also VERY WELL connected. Spreaders seem to lift out in large numbers as price bottoms so I am going to go with this view until proven otherwise. I will have to wait another week to validate this however since the June 8 release of the COT will catch whatever took place. I mentioned in yesterday’s commentary that I felt there was fresh buying by bottom pickers in yesterday’s session. That was proven correct by the release of today’s open interest numbers. Those bottom pickers nailed it perfectly.

Marie
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