COT Silver Futures: Large Speculators Vs Commercials
Silver Non-Commercial Positions:
– Zachary Storella: Large speculators and traders continued to boost their bullish net positions in the silver futures markets last week for a third consecutive week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.
The non-commercial futures contracts of Comex silver futures, traded by large speculators and hedge funds, totaled a net position of 105,515 contracts in the data reported through April 11th. This was a weekly gain of 4,133 contracts from the previous week which had a total of 101,382 net contracts.
The latest data brings the net position to the most bullish speculative level on record and marks the second straight week over the +100,000 net contract level. Silver speculative positions have grown by +26,403 net contracts in just the past three weeks.
Silver Commercial Positions:
The commercial traders position, categorized by the CFTC as hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -114,414 contracts last week. This is a weekly change of -2,068 contracts from the total net of -112,346 contracts reported the previous week.
– Taki Tsaklanos: Silver prices are as close as can be to a major breakout point. Silver could start a tactical bull market once it goes higher from here, and remains above $19 for 3 consecutive weeks.
However, readers should not confuse a major breakout with a secular breakout. A major breakout indicates that a tactical bull market is starting. A secular breakout suggests a multi-year bull market is starting. That is a big difference.
The chart below shows the weekly chart on 5 years. The breakout point is indicated with the red circle.
Note that a secular bull market can only be spotted on a +10 year chart.
The price of silver successfully tested support in January, only to find strong resistance at $19 in March. That is when we became bearish and saw silver going back to $15 or lower. Slightly later, we observed that March 2017 would be a decisive month for the price of silver. Indeed, silver went higher in March and April, a more bullish development than we expected.
Interestingly, silver prices look stronger than gold at this point.
The secular breakout will occur between $20 and $22. Silver prices still have some resistance to overcome, but, admittedly, the grey metal looks quite constructive at this point.
Silver bulls want to see a strong breakout at $19 with at least 3 consecutive weeks of trading above $19. After that, it will probably move quickly to the $21 area where it will find the ultimate resistance.
Note that seasonality is not in favor of gold and silver. May and June are typically the weakest months of the year for precious metals. We still cannot believe that silver will jump right into a major secular bull market in the coming months, but the odds of a new bull market in 2018 are definitely increasingly strongly. We will follow silver prices very closely this year.
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