Committment Of Traders Report For This Week

Despite the holiday, the Commitment of Traders reports were released this afternoon. This post takes the place of my normal discussion of them, in the regular end-of-week commentary on the the gold and U.S. Dollar Index markets. Both reports cover positions as of last Tuesday, March 31st. That was the day before the two-day rally in gold, and the end of a relief rally for the greenback.

The COT for gold, as graphed here, shows a real shrinkage overall. Total open interest declined, by 12,326 contracts or 3.00%, and the number of non-commercial longs shrunk by 11,598 contracts or 5.24%. The big decliner in the long category was non-reportable positions. Bucking the trend, commercial longs increased markedly: by 10,968 contracts, or 8.81%. Given how gold performed over the rest of the week, it looks like some on the non-commerical side was gotten the better of after Tuesday.

On the short side, the non-commercial category shrunk too, but not by that much: 1492 contracts, or 3.97%. This shrinkage does add to the impression that non-commercial shorts tend to be cannier than non-commerical longs. Commerical shorts shrunk by 5,164 contracts, or by a mere 1.48%. As with the long side, the big shrinkage in percentage terms was in non-reportable contracts.

For the U.S. Dollar Index, as graphed here, total open interest ballooned for the second week in a row. From March 23rd's 49,119 contracts, March 31's increased to 58,227 for an increase of 9,108 contracts or 18.5%. Interestingly, both commercial and non-commercial long positions expanded. The former went up by 913 contracts, or 16.4%, and the latter went up by 7,658 contracts or 20.0%. Both categories were hit subsequently by Wednesday's and Thursday's fall in the Index.

Also interestingly, the shorts in both commerical and non-commerical categories expanded. The former went up by 5,099 contracts, or 12.5%, and the latter went up by 4,692 contracts or a brow-raising 76.2%. In the U.S. Dollar Index market, the non-commercial shorts certainly picked up more than their share of the slack created by the expansion of longs in both categories.

The impression left for both is an old saw of the commodities market: the shorts tend to know what they're doing more than the longs. One quirk of the U.S. Dollar Index category is the commerical longs being caught out by downturns as well as the non-commericals.