Just a few days ago, I reported that J.P. Morgan vault had a significant amount of eligible gold taken away. I didn't know what it meant.
Today, another 175000 eligible gold was taken away, this time by HSBC and J.P. Morgan, who are seen to be the main manipulators in the precious metals market.
This is all nice to report, but I still don't know what it physically means.
But let's try to understand the CFTC market and COT data.
But let's try to understand the CFTC market and COT data.
First off, when open interest increases in gold (Chart 2), it means that inventory needs to be replenished. Analogy: if you get increasing orders (higher open interest), you should have a higher stock level to meet demand.
So if open interest increases on Chart 2, registered bullion stock levels should go up too on Chart 1. We can see that Chart 1 and Chart 2 correlate very well. Also, Chart 3 and Chart 4 correlate very well too.
Gold:
Chart 1: Gold COMEX Stock |
Chart 2: Open Interest Gold |
Chart 3: Silver COMEX Stock |
Chart 4: Open Interest Silver |
So actually it's very handy to monitor the COMEX stock levels and compare it to the open interest chart of the CFTC.
very sharp insight.
BeantwoordenVerwijderenDo selloffs in silver correlate to when COT is rising and inventory is falling? That is the banks need to force down price because inventory is declining but open interest is rising?
BeantwoordenVerwijderenSurprisingly, open interest correlates to net short positions of LCNS. So if open interest goes up, it's almost always shorting of the commercials. You would think, maybe it's long positions going up, but it's not.
VerwijderenSo if there is a high open interest, inventory should go up too. If it doesn't, that means open interest should go down together with net short positions. So they manipulate silver lower to get out of those net short positions to match the inventory.
So basically you're right.
That reminds me, I need to update the list of correlations. LCNS net short positions Correlate to Open Interest.
Verwijderen