The latest commitment of traders (CoT) is a gold bull’s fantasy come true. I grinned ear to ear when I saw it. I was wondering what the recent drop in Crimex open interest below 400,000 was about, and the CoT through last Tuesday 11/24 provided the answer. Keep in mind that POG was basically unchanged for the reporting week at the 1075 level. Prices are now a bit lower so one can presume this is even more bullish.

The managed money boyz continued playing in the sand box adding 2,741 net shorts taking their total to another record 16,664 net short contracts. Combined with small specs the net short of both the small and large specs is an abnormally large and unprecedented 20,983 (2,098,300 paper ounces).

The swap dealers eagerly covered shorts to the tune of net 7,964 contracts. They are in greatly reduced positions, but also now have a very high and very bullish 29,495 net long position. Producers/processors reduced net shorts another 7,429 contracts.

Total registered gold at the Crimex dropped by another 16,700 oz overnight to just 134,877 oz (1349 contracts). Notably there were also 201 (20,100 oz) delivered off of the old November contract on the very last day, so somebody took most of that completely out of the Crimex warehouses.

Gold bulls who propose the manipulation or broken market story have pointed to the lack of physical relative to Crimex (and London) paper for awhile. Nothing has yet happened leading most to conclude, nothing to see here move along.

However, we have never seen the combination of such little Crimex registered gold on hand combined with commercials holding such a very large bullish bet. If ever there was an opening to easily cause disruption and a world of hurt to the Crimex and the paper short speculators this is it. With first day notice past there are still 5,833 (583,300 oz) December contracts looming large.

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