Why do Banks Continue Silver Shorting so Aggressively?
At some point, a doubt becomes “why”. With bullion now adult 17% year-to-date, china is adult only half that volume during 9.5%. And yet, a latest CoT news shows a top china Commercial net brief position given 2008. Again, why? Why now?
That’s truly a $64MM question. Why are The Silver Banks shorting so aggressively here? What’s a disproportion in holding cost subsequent $16 contra $18 or $20? We’ll get a demeanour during a latest CoT information tomorrow but, for now, cruise this:
There was a CoT consult taken on Tuesday, Dec 29, 2015. The shutting cost of china that day was $13.93. The information showed that a Silver Commercial NET brief position was only underneath 30,000 contracts as they were prolonged 52,149 contracts and brief 82,027.
The many new CoT information expelled final Friday was surveyed behind on Tuesday, Feb 16. That day, china prices sealed during $15.33. Versus Dec 29, cost had risen by $1.40 or roughly accurately 10%. And how had a Silver Commercial NET brief position changed? They were now prolonged 44,638 contracts and brief 114,700 for a NET brief position of 70,062 contracts. Again, this is a largest Silver Commercial NET brief position given 2008.
Additionally, demeanour during what has transpired in a 6 days given that final CoT survey. Total Comex china open seductiveness has risen by another 7,000 contracts, that really expected increases a Silver Commercial NET brief position to over 75,000 contracts…all a while, cost has indeed depressed by 4¢.
Therefore, it isn’t really difficult to envision what’s expected to come next. A cost raid. Do we remember this draft from final October?
Or how about this draft from final Friday?
It is extravagantly transparent that JPM and their associate Big Shorts on a Comex are vigilant on attempting to make reduce prices. Otherwise, because would they be so austere about offered into and capping each attempted rally? And this latest capping bid is a many sum yet! It’s ideally excellent for any entity, Commercial or Spec, to repay longs into an ongoing convene and, as remarkable above, a Silver Commercials have dumped scarcely 7,500 contracts so distant in 2016. However, what is really NOT excellent is to concede a total origination of paper china in sequence to accommodate Speculator paper demand.
Again, note that a Silver Commercial sum brief position behind in late Dec was 82,027 contracts. That’s a contractual requirement to broach adult to 410MM ounces of china if called on to do so. As of final Tuesday Feb 16, a Silver Commercial sum brief position had grown to 114,700 contracts or 573MM ounces of silver. That’s 60% of all a china a universe will cave in 2016!
So a questions contingency be asked again:
- Where would cost be currently if a Silver Commercials had not sole and shorted so many contracts into this 2016 rally?
- And if a buyer/seller balance cost was $18 instead of $15, what would be a difference?
- And because are a Commercials so vigilant on capping silver? Over a same time period, bullion has risen 17% though a Gold Commercial NET brief position stays subsequent levels seen during cost peaks in 2014 and 2015.
Could this draft have anything to do with it?
So, we’ll have to see what happens next. Logic dictates that a cost raid is entrance that will concede a Commercials to buy behind and cover some of their brief position while a Specs tide for a exits. But afterwards what? The draft above shows an increasingly illogical position for JPM and their friends. Paper cost seems to have been driven as artificially low as possible, so a bid done to reason it behind is increasing. And we haven’t even mentioned a gold:silver ratio!
What’s a best plan for traffic with all of this? For me, it’s a continued, light stacking of earthy silver. Predicting a accurate date of a disaster of a china strategy intrigue is a fool’s errand. But, destroy it will, only as all cost manipulations before it have likewise failed. And, WHEN it fails, a events will be fantastic to behold.
Courtesy: Turd Ferguson
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