Commercial Open Interest t on COMEX and the Gold Market William Purpura Chairman Northport Commodities COMEX Governors Committee 8 th Chi G ld d P i M l S i 8 th China Gold and Precious Metals Summit 6 December, 2013 Shanghai, PRC
Disclaimer This information is available for informational purposes only. Attempts, t wherever possible, have been to make statements in good faith based upon current information and expectations by using words such as "anticipate," "believes," "expects" and words and terms of similar substance. Any forward-looking statements made involve a number of risks, trends, and uncertainties and other factors that may cause actual results to differ materially. As such, readers are cautioned not to place undue reliance on the information contained herein, which only speaks as of the date of the issuance of this information actual results to differ materially. As such, readers are cautioned not to place reliance on the information contained herein, which only speaks as of the date of the issuance of this information. No offer to solicit is being made by William Purpura, Northport Commodities Pte Ltd or COMEX.
Contents Importance of open interest reporting CFTC Commitment of Traders Reports Commercial positions Net positions, lending and interest rates Analysis of price and correlations
Open Interest Number of contracts outstanding in futures and options COMEX is the largest gold futures market COMEX contracts can be physically delivered COMEX open interest is critical data for many traders Updated daily around 10:30 New York time
Dec 13 and Feb 14 COMEX Gold open interest into rollover period 250000 200000 150000 100000 Dec 13 OI Feb 14 OI 50000 0 Source: COMEX
CFTC Commitment of Traders Report A breakdown of each Tuesday s open interest for markets in which 20 or more traders hold positions equal to or above reporting levels. Released each Friday at 15:30 Eastern time. Available in short and long forms. Separates open interest tby reportable tbl and nonreportable positions. Reportable data is provided for commercial and noncommercial holdings. Current and historical data available at www. CFTC.gov.
Net Short Commercial Positions and Gold Prices COMEX Futures and Options (000s contracts) Commercials net long Source: CFTC
Weekly COMEX Nearby Gold December 2009 to Present commercial short positions exceed 300,000 contracts Source: Bloomberg
Daily COMEX Nearby Contract 2011 commercial short positions 7 July to 8 August exceeds 300,000 contracts Source: Bloombert
Commitment of Traders 5 Oct 2012 Source: CFTC Spot Gold Weekly Chart The COT report from 5 October 2012 showed commercials were net short more than 300,000 COMEX Gold contracts (futures and options equivalent) for the third time in the past 3 years. There was a correction each of the last two times. Large commercial short positions in silver were also reported.
The resulting move in gold COT High Spot Gold Daily Chart Obama rally Gold fell to $1672.65 before correcting. Post US election rally ensued once it was apparent Obama won.
COMEX Silver Prices and Commercial Shorts Source: CFTC, Northport t USA
Commercial Net Shorts and COMEX Gold Stocks Eligible and registered stocks in COMEX New York depositories Source: CFTC, COMEX
Gold Futures Prices and GOFO Rates Source: Bloomberg
Commercial Short Positions and GOFO Source: Bloomberg
Commercial Net Shorts and GLD Physical Holdings Source: Bloomberg
GLD ETF Share Price and Physical Holdings (tons) Source: Bloomberg
Gold is flowing to the East Drawdowns in investment gold in the West are being absorbed by demand in the East. London Good Delivery and other large bars are being converted by refiners into kilo-sized and smaller bars, the preferred denominations of Asian consumers. Singapore s elimination of the GST on gold has resulted in kilos moving into Singaporean vaults. Hong Kong vault activity is robust.
China Gold basis has tightened Source: Bloomberg
Exchange Traded Gold Goes Global SGE and SHFE both have night sessions that align with New York trading hours Shanghai h Free Trade Zone will make it easier for foreigners to access the China gold markets. Singapore exchanges may join the party. Will the pricing center move from West to East? COMEX remains the market of choice, dominating open interest, but must not become complacent. COMEX options remain the most developed, liquid and transparent. COMEX memberships offer significant benefits to large traders.
30 Cecil Street, Singapore Trading Technology Research William Purpura, 董事长 wpurpura@gltdirect.com t 于莹, 中国区交易总监 yu.ying@northportltd.com 北港控股分支机构新加坡纽约上海