Silver: speculators brought down the net position

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators have decreased their net buying position in silver for the third week in a row, after it had risen sharply in mid-July to the highest levels since April 2022. This week, the net position dropped to 13.3k contracts, a decrease of 17.5k contracts from the previous week. This is the lowest net position since March 21.

Hedger operators have decreased their net sell position in silver for the third consecutive week, bringing it down to 30.3k contracts - a 13.7k contract decrease from the previous week. This is the lowest net position since July 2.

The number of open contracts decreased by 6.5 thousand, bringing the total to 137.6 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.49 over the week, bringing it to 1.33.

The COT silver data shows a dramatic increase in bearish sentiment. Over the past week, traders have significantly reduced their net position on rising prices. This has resulted in the sharp increase in net position seen in mid-July being leveled out over the last three weeks, with the net position of large speculators even dropping below the levels of July. Large funds have decreased their purchases by 21% in a week, while sales have also increased. If this trend continues, it could lead to lower prices for the precious metal.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts, while open interest is the total of all open positions in the market.