The Comex Gold Short Position

I felt compelled to clarify the commentary out “there” discussing the non-commercial short position in gold.  An interviewee on one of the widely viewed precious metals and economic websites referenced the record “speculator” short position in Comex gold futures.

In my opinion this is misleading because it is the “managed money” segment of the non-commercial “speculator” trader category in the CFTC’s COT report that encompasses the entire net short position (click image to enlarge):

The image above shows the latest disaggregated COT report. The disaggregated COT report debuted in October 2009.  Disaggregated data was made available going back to June 13, 2006. Previously the report was separated into “Commericials, large speculators and non-reportables.” The large speculators were the “managed money and other reportables.” The “managed money” is primarily hedge funds. No one outside of the Comex operators can say exactly what the “other reportable” category is (many attempts have been made to get clarification over the years). It’s likely larger pools of non-institutional capital like family office money and wealthy foundations. The “non-reportable” category is retail accounts.

I will note that when JP Morgan was caught and fined for mis-reporting the Comex silver futures trades it clears, the bank was caught stuffing trades that belonged in the “swap dealer” account into the “other reportable” account.

This clarification is important to point out for two reasons. First, as you can see, in the non-commercial trader accounts,  the hedge funds comprise the entire amount of the non-commercial/non-bank net short position. The Other Reportables and Non-Reportables are net long. In fact, the Other Reportables increased its net long position last week.

Second, not only is the hedge fund net short position at a record level, the “Swap Dealer” (i.e. the banks) account is close to an all-time net long position at 31,259 contracts. Based on the historical disaggregated spreadsheet maintained by my business partner, the only time the bank net long position was larger was a two-week period in December 2015 (12/15 – 32,550 and 12/22 – 31,692) and a two-week period in July 2017.  However, during the July 2017 period, when the swap dealers were net long at a record level, it was also accompanied by a net long position by the hedge funds.   Overall the commercial category in mid-July 2017 was still short over 70,000 contracts (the “producer/merchant/processor/user” commercial category includes bank positions that are theoretically not used to hedge).

I wanted to clarify the issue with the COT report because it’s important to note that the banks are almost always right with their gold futures positioning and the hedge funds are almost always wrong. The implication of this is obvious.

I discuss the significance of the net long/net short positioning by the banks and the hedge funds in Comex gold futures with Trevor Hall of Clear Creek Digital in our collaborative project, Mining Stock Daily (click on image below to listen – this was recorded before Friday’s COT report was released):

Mining Stock Daily can also be accessed using Amazon Alexa, Google podcasts and Apple i-Tunes.

13 thoughts on “The Comex Gold Short Position

  1. You missed July last year, 07/18/2017 precisely, for the all time high net long” Swap Dealer”

    07/11/2017 -> 43 721
    07/18/2017 -> 47 163
    07/25/2017 -> 34 218

    1. You are correct and I overlooked that period because the hedge funds were also net long, thereby
      negating the significance of the swap dealer long position. The commercial segment still have
      large net short position (producer/merchant/processor/user) and banks are known to throw large portions
      of their positions in producer category.

    1. Yes. And can you be more specific? What type of accounts are they? JP Morgan was putting house silver trades
      into the Other Reportables. You can try to email the CME and get clarification. I know several how have including
      myself and were given the Heisman pose from the CME.

  2. The long position for “other reportables” is very high right now, so it seems they hedge consumer or paper short position. If they don’t hedge they are simply contrarian.
    Yes i’ll email them to try to put some light on this black hole.

    1. Dont’ over-think this. The key variables are the Commercials vs the hedge funds. The other reportables and non reportables are irrelevant except when JP Morgan throws trades into the other reportables and gets caught

  3. Dave, if the Shanghai Gold exchange announced that one once of gold would start at a cost of $10,000USD/oz per futures contract and go up from there per the market dynamic. Also the Singapore Gold exchange and the Dubai Gold exchange and any other exchanges did the same in a coordinated effort.

    Question: What impact would this have on the Comex and LBMA? Would not buyers on the Comex & LBMA buy like crazy and take physical delivery and sell it on the Shanghai Gold Exchange via price arbitrage? Would this not break the Comex and LBMA?

  4. Dave,

    Why commercials for producers (short position) sell when price goes up and buy when price goes down ?

    It seems they are not commercials or hedgers.
    When you hedge its a quantity and you buy (reduce the hedge) and sell (increase the hedge) according to the flow (out and in respectively) of your underlying (physical).
    When you buy and sell according to price you speculate for profit, not to suppress the business risk.
    So it seems that commercials who buy and sell according to price must be in speculator, money manager category with the hedge funds.
    Unless there is continuous outflow when price goes down and continuous inflow when price goes up.

    1. Go to and sift thru the archives. Or subscribe to my Mining Stock Journal. I cover the COT in-depth
      when it’s relevant

  5. CFTC replied swiftly concerning the “other reportables”.

    CFTC Form 40 is used to classify traders. The old paper form can be found at Generally we will accept a trader’s claim that they are using futures for commercial purposes. If accepted by us, the trader is classed as commercial in the commodities selected on the Form 40. The trader’s positions in all other commodities will be non-commercial. So yes, non-commercials are a residual.

    Non-commercial positions are split into ‘managed money’ or ‘other reportable’ for the disaggregated report. NFA registration as a CPO/CTA, NFA exemption from registration as a CTA/CPO, or foreign entities self-identifying as a hedge fund will be classed as a ‘money manager’. Note that NFA registration or NFA exemption is key for US entities classed as a ‘money manager’. The remaining non-commercial positions are placed in the ‘other reportable’ category.

    1. Still lack specifics. Tell me what type of specific account of non-reportable. All you did
      is reinvent the wheel that many of us have already seen and experienced.

  6. As you say Dave, don’t over think this.
    The COT report on gold and silver is nothing more than smoke on the water.
    What matters is the physical.
    Do you have any? Is it in your possession? Do you have a plan.
    These are the things that really matter. Wringing your hands over daily/weekly price movements is wasted energy. Accumulate within your means. Sleep well.

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