Some interesting insight from Ted Butler’s latest:

But it was in gold that the most notable developments occurred and also involved the gold raptors. For the first time I can recall, the 4 largest gold traders sold short a significant number of contracts (7,000) on a general price decline during the reporting week. (While gold prices finished flat Tuesday through Tuesday, three successive multi-month price lows were recorded during that period). This raised the big 4’s net short position to a record 180,000+ contracts.

Never, in my memory, had the largest gold short traders sold on the downside. This does increase their determination to artificially depress prices. One of the standard lines from the CFTC has always been that the large short traders can’t be manipulating the price because they always buy on sell-offs. I’d like to see the Commission spin this development.

Even more interesting was that the gold raptors (the 9+ commercial traders) bought what the big 4 sold short. In fact, these raptors now hold a near record net long position, against the big 4’s record short position. Talk about a dichotomy - commercial against commercial. Since there is no precedent for this match-up, there is no historical track record to offer guidance on the resolution. But it does suggest we are at a critical point…