COT figures — the underlying position

COT numbers for last Tuesday detailed positions of hedge funds and Swaps. While hedge funds are over-bullish, the Swaps are heading for trouble if the physical squeeze on them continues.

On Friday, at 17,790 gold contracts, there was a big jump in Comex Exchange-For-Physicals (EFPs). An EFP is when a futures contract is exchanged for a forward contract in London. In other words, either futures contracts are sold in return for a London forward equivalent, or a London forward position is sold in return for a Comex futures equivalent. We c…