What’s The COMEX COT Report Telling Us?

April 29, 2019 

* 1st QTR GDP is revised upward and Chuck takes exception to its print! 

* Currencies and metal Traders don’t buy the GDP report! 

Good Day… And a Marvelous Monday to you! Man have I got a bone to pick with the Gov’t bean counters this morning… They actually put a damper on my weekend, and so, I’m going to take them to the woodshed this morning! Our Blues got the 2nd round of the playoff started on the right foot with a win on home ice Thursday night, but lost the second game on Saturday, and Now the series moves to Dallas, where I saw on TV that they are prohibiting sales of tickets to Missouri residents… So, Blues fans, if you want to go to see your Blues play in Big D, then you’ll have to buy them 2nd hand… No biggie, people are used to using Stub Hub to buy tickets these days… Paul Young greets me this morning with his 80’s song: Every Time You Go Away… Very apropos for me today, since I’m alone again now… Whenever this song plays I think of a former Mark Twain Bank colleague, Janet Young, who loved this song… I wonder where Janet, now Rogers, is these days?

OK… let me first say that even though the Government accountants tried to pull a fast one on us last week, the currencies and certainly not Gold traders didn’t fall for it, and neither should you… The currencies are trading a bit stronger this morning as evidenced by the Dollar Index, that is trading at 98.02 this morning and it was 98.30 last Thursday morning… No big moves, but a general direction that’s promising for non dollar holders… 

Gold finally got unleashed, and gained over $9 on Friday…  And Palladium kept going with its renewed interest gaining appeal.  Well, the COMEX issued a report last Friday, like they do every Friday, called the Commitment of Traders, or COT report… These COT reports are what technical traders use to see if their charts align with what the COT report is telling them… In this case, is the bottom in for Gold & Silver? Well, The GATA folks sent me a note yesterday explaining why they believe the COT is telling them the bottom is in for Gold & Silver… Let’s listen to a short piece from the GATA folks… “These positions are reported weekly in the CoT (Commitment of Traders) report issued by COMEX. Followers of this report have seen instances of the Managed Money long positions turning to or near short (or at least ‘bottoming’) and the Commercials short positions nearing nil or even long (or at least ‘bottoming’) preceding substantial market rallies.”

You don’t have to be a Technical guru, or someone who is very aware of the COT reports, all you have to do is to stop and listen to people that see these things for what they are, and that is a rally in Gold & Silver is coming… Is the bottom in? That’s difficult to say, but I would think that given this info, that the bottom if not in, is near an end… I’m just saying!

OK… I can’t hold my breath any longer, I’ve got to let it out… What a bunch of BS! 1st QTR GDP was revised upward, yes, I said upward, to 3.2% from a previous reading of 2.3%… What a bunch of hogwash! Yes, the March numbers are coming in a little better than previously thought, but that’s just one month of the quarter, the first two months were horrendous with data!… And a little better than previously thought March, brings the 2.3% print to 3.2%? I’m not buying it, and you shouldn’t either folks… I’ve come to the realization that whenever we see a negative or weak print one month, that the boys in the back room that count the beans get called on the carpet and told to not let that happen again… And thus, we see immaculate turnarounds in data from month to month… I know there’s nothing I can do about it, so I’m not going to let this get me all ticked off and such… I’ll just say my piece and move along… 

Oh, and let us not forget that the U.S. Gov’t was shutdown for a period of time during the 1st QTR… Are the bean counters telling us that it had no effect what-so-ever on economic growth? Or did they forget, that we have long memories and would remember the shutdown? I’m betting that it was the latter of the two! These guys that put together the economic reports have become so brazen, with their reporting, that someone, somewhere with a strong identity, should stand up and be heard that it’s all a bunch of hogwash! Pig slop, road pizza, whatever it’s all getting on my nerves, and it should be getting on yours too!

And don’t just take my word that the GDP print was hogwash… Let’s listen to what one of my fave economists, David Rosenberg, had to say about it… “This was a low-quality GDP report. All one-offs – lower imports, higher inventories & Pentagon spending. Real final private sales a puny 1.3%. Removing more lipstick from this pig shows cyclically-adjusted GDP contracting at a 2% annual rate; deepest decline in nearly a decade .” – David Rosenberg from his Twitter feed.

And did you hear this one? Global Growth has dipped negative in the first quarter of the year on a year on year basis, this is the first time that’s happened in over a decade! And we’re supposed to believe that a negative Global Growth in the first quarter, led to an upward revised GDP of 3.2% here in the U.S.? Come on, what do you guys take us for a bunch of dolts? 

I guess using the fact that they printed the number and didn’t look back, that they do undoubtedly take us for a bunch of dolts!  Well, I’m mad as hell and I’m not going to take it any longer!  Or something like that… 

But as Neil Young sang… Don’t let it get you down, it’s only castles burning…  

I’ve been so keyed up about writing this morning regarding the upward revised 1st GDP report, that I’ve spent the whole letter, just about on just that!  But you can see from my talking about it so much that it means something to me, that these things happen for a reason, and the reason is… to keep everyone happy, and from grabbing their shovels and pitchforks and rakes and marching on their respective state house… Oh? What’s that you say? People don’t do that any longer because they’ve become so about themselves, that they wouldn’t report a crime if it happened in their front lawn?  Oh, I don’t believe that for one minute! But it sure seems that we, as a people, are heading in that direction, to ignore these types of things, instead of proactively writing or calling one’s representatives and giving them a piece of their minds…  I’m just saying…

The U.S. Data Cupboard gets this week started with a bang this morning as it will yield the Personal Income and Spending reports from March, along with core inflation…  The spending for March was probably better than the average bear, given the lead up to Easter, and spring and St. Patty’s Day, and so on…   And we’ll end the week with the April Jobs Jamboree, which at this point is being forecast to have added  190,000 jobs…  The BLS is another of those brazen bean counters that just gets my dander up! 

To recap… The 2nd QTR GDP was revised up from 2.3% to 3.2% last Thursday, and they threw a ticker tape parade down Wall Street for happy days were here again!  Not so fast there bucko…  Chuck has his bone to pick with the guys and girls that put together the reports…  But the currency and metals traders didn’t buy the report, and they have seen rallied since the report was printed…  And the COMEX printed a very favorable COT on Friday that the GATA folks believe is an indication that the bottom for Gold and Silver is in… 

For What It’s Worth….  Well, since I talked about the question of whether the bottom was in or not for Gold in today’s letter, I thought that this article that talks about demand for physical Gold at the Perth Mint had surged in March was apropos… And it can be found here: https://www.coinnews.net/2019/04/26/perth-mint-gold-and-silver-bullion-sales-surg

Or, here’s your snippet: “Australian gold and silver bullion sales advanced sharply in March from February but they declined in the first quarter 2019 compared to the same period in 2018, according to figures from The Perth Mint of Australia.

The Mint’s gold sales in March was the highest in four months after logging an eight-month low in February and demand for its silver coins and bars climbed to a five-month high after sliding to a six-month low.
March increases happened against a backdrop of plunging precious metals with LBMA prices registering losses of 1.8% for gold and 4.5% for silver.
Bullion Sales in March 2019

March sales of the Mint’s gold coins and gold bars reached 32,757 ounces, posting gains of 67.8% from February and 9.6% from March 2018.”

Chuck Again… Well that’s two signs that Gold is preparing for a upward run… That’s good enough for me! 

Currencies today 4/29/19 American Style: A$.7050, kiwi .6666, C$ .7423, euro 1.1150, sterling 1.2924, Swiss $.9801, European Style: rand 14.3119, krone 8.6829, SEK 9.5068, forint 289.20, zloty 3.8490, koruna 22.0250, RUB 64.75, yen 111.77, sing 1.3621, HKD 7.8435, INR 69.91, China 6.7283, peso 18.94, BRL 3.9240, Dollar Index 98.02, Oil $63.19, 10-year 2.51%, Silver $15.05, Platinum $899.00, Palladium $1,460.00, and Gold… $1,281.30

That’s it for today…  And nice homestand was completed by my beloved Cardinals yesterday, with a win… They seem to have righted the ship with hitting, but now injuries are mounting for pitching… Uh-oh…   Our Blues are back on the ice, tonight, they need to win one of the two that will be played in Big D…   I did some cooking on Friday and Saturday for the Lindbergh H.S. Water Polo Tournament. I was told that what I cooked was a hit!  Well, even a blind squirrel can find an acorn! HA!  This took me much longer to write today because I kept going back and deleting some things I said… Better not said, here but on the Butler Patio, would be just fine!  I read a thing this weekend that we as writers use the ! too much… Well to that I say, I don’t care!!!!!!!   The great Elvis Presley takes us to the finish line today with his song: One Night…  ( I love this song version of the song!) I hope you have a Marvelous Monday and will Be Good To Yourself!

Chuck Butler