COT Update After a fairly long holiday delay, the Commitments of Traders Report (COT) for positions as of the close of business last Tuesday, December 23, was released today. Today also marked the cutoff for reporting week for the COT report to be reported next Monday. There wasn't much change in the headline number for COMEX silver futures, but some notable crosscurrents under the hood. COMEX gold futures featured a reduction in the headline number of the total commercial net short position, as well as some twists in the various commercial categories. In COMEX gold futures and during a reporting week in which prices finished about $20 lower, the commercials reduced their total net short position by 9,900 contracts to 105,200 contracts. Despite the reduction, the total commercial net short position is still 50,000 contracts higher than the low point on Nov 11, which in turn was…

Relying on past experience, I assumed the COT report, covering COMEX positions as of the close Tuesday December 23, would be out today. It turns out it will be published tomorrow. Accordingly, I'll have comments late tomorrow on the report and will once again skip this Wednesday's article and publish a weekly review on Saturday along with separate comments on Monday January 5, when this week's holiday delayed COT report will be published. Sorry for any confusion.

Weekly Review The holiday trading week started off weak and ended strong, resulting in a near unchanged finish for gold and silver. Gold ended $2 higher, while silver was flat for the week. As a result, the silver/gold price ratio remained largely unchanged for the week, at just under 74.5 to 1. A year ago, the price ratio was close to 60 to 1 and this is the second full year running that silver has vastly underperformed gold, contrary to my expectations and understanding of the facts in both metals. I'll get into this a bit later on. For the second consecutive week, the turnover or physical movement of metal into and out from the COMEX-approved silver warehouses remained well below the average weekly movement this year of close to 5 million oz, as “only” 2 million oz of silver were physically moved. Perhaps it had something…

Weekly Review As a result of the selloff earlier this week, the price of gold and silver ended sharply lower, with gold ending the week down $28 (2.3%) while silver ended a full dollar (5.9%) lower. Due to silver's pronounced relative underperformance, the silver/gold price ratio widened out by nearly two and half points to just under 74.5 to 1, after trading even higher. As always, it is the consistently larger price moves in silver that dictate changes in the ratio. It would appear certain that the recent increase in price volatility (for reasons previously discussed) will continue to impact short term changes in the ratio. Over the longer term, however, all the facts suggest silver is extremely undervalued relative to gold (and just about every other asset). On Wednesday, I concluded that it was impossible to connect the sharp selloff on Monday and Tuesday to any…

The Final Selloff? From the close on Friday through yesterday's low, the price of silver fell $1.50, or close to 9%. No other commodity, including crude oil, fell as much as silver did over that time. Generally, such a large percentage decline in any world commodity in less than two trading days is a pretty big deal and would only occur if there was some easily documented major supply/demand development. I follow silver pretty closely and not only was I not able to uncover any major change in silver's actual supply/demand situation, I couldn't find even a minor development that would have accounted for the sudden large price decline. I would ask you to think about that for a moment. Any investor or analyst of any world commodity must be able to account for and rationalize a 9% price move in less than two trading days; otherwise…

Weekly Review For the second consecutive week, gold and silver tacked on gains, with both achieving seven week highs. Gold added $29 (2.4%), while silver finished higher by 75 cents (4.6%). As a result of silver's relative outperformance, the silver/gold price ratio tightened in another one and a half points to under 72 to 1. Although silver is now valued stronger to gold than it has been in two months, it is more undervalued on any other longer term basis; making silver a more compelling relative investment value, in my opinion. It was an unusual week, in that all the price action was on Tuesday with the rest of the week being flat to down. You may recall on Tuesday, both gold and silver decisively penetrated their 50 day moving averages on high volume; with silver having done so for only the first time in six months.…