The hottest commodity of the week was silver once again, but the majority of the upwards price movement took place after Tuesday (the COT (Commitment of Traders) is always from Tuesday to Tuesday, thus it is hard to tell what the current structure of the COT looks like. Similar too recent weeks there are subtle structural changes taking place, this week in the 4 largest banks net short position which was only slightly reduced.
This week’s COT report doesn’t say much relative to the past month. We will have to wait until next week to see more dramatic changes as it is highly likely due to a new 30 year record closing price. Silver investors can be reassured they are winning the battle against the commercial banks no matter the degree of manipulation that is taking place as the laws of supply and demand are winning out.
For those who unaware of the fundamentals (production less consumption), Silver has the single best fundamentals out of any commodity in the CRB yearbook, which has been running large annual deficits for several decades. Above ground silver as of the year end 2009 was estimated to be between 800m-1b ounces of above ground silver. In other words, it has become scarcer than gold, at least above ground, due to many factors, including the fact that silver wasn’t economical to recycle as a result of the same manipulation that is taking place today. The big commercial banks, however, are no match for the power of markets. The following is the last 5 weeks of COT data, adjusted for commercials and non commercial spreading.
