Well the CFTC meets today to discuss position limits in the energy markets. This to me explains why oil has been weak over the last week or so as traders are not sure how the establishment and ex Goldman employee are going to affect the rules this time.

Some traders suspect that there will only be hard position limits enforced against the longs and pooled accounts like ETF's while the shorts get to ply there trade with no enforcement. This would certainly explain the weakness in oil lately.

Some commentators think that any ruling on oil trading would be indicative of what is to come in the metal complex and for the prescious metals most importantly.

The oil market and prescious metals markets are not the same since in the energy market much of the futures bought are actually asked for delivery because they are purchased by the end user. This is not so for the prescious metals as almost all the futures are never asked for delivery and thus certain market riggers have been able to sell paper metals and never worry about delivering them. With the power to create an unlimit paper supply of prescious metals they have been able to in the past always shake out the longs. This has served to suppress the price of the prescious metals and also has been very profitable for them.

This trade appears to be coming to an end as the few bullion banks who hold almost all of the short bullion on the exchanges have not been able to shake out the longs this time significantly. They have tried other tricks such as raising the margin requirements which did cause the fall back in December but again that is coming to an end because if they raise them too much they will ruin that market and everyone will just ask for delivery. The same can be said if they just enforce the position limits on the longs as some rightly think is a possibility. This would tell even the simpletons who invest in gold and silver futures and never take delivery that the market is totally rigged against them.

There has been no news of this event to speak of in the media so I suspect that my prior thoughts on this subject are still the most likely outcome.

All in my honest opinion of course.

F.F.