Why is it so Important to a Banks to Suppress a Silver Price?
The Bullion Bank trade desks, that are customarily brief thousands of metric tonnes of digital silver, are once again attempting to keep cost subsequent a 200-day relocating average.
And given is this so vicious to The Banks? For a many elementary reasons of all…greed and profit.
The usually information accessible to magnitude a distance of a Bank net brief position in Comex china comes from a hurtful and compromised CFTC. Though it seems invalid to use CFTC-generated data, unfortunately we have no other choice. To that end, as of a many new reporting, we find Bank positions as follows:
• As totalled by a latest Commitment of Traders Report, a NET position of a “commercials” in Comex china is 80,436 contracts short. As totalled by a latest Bank Participation Report, a NET position of a 24 Banks concerned in Comex china is 69,473 contracts short. For a consequence of simplicity, let’s only use a smaller BPR series and turn it adult t0 70,000 contracts NET SHORT for The Banks that trade on a Comex.
At 5,000 ounces of digital china per Comex contract, 70,000 contracts is a net brief position of 350,000,000 ounces or about 40% of sum 2017 tellurian cave supply. (It’s also about 150% of a sum volume of china allegedly hold in a Comex vaults yet we’ll save that subject for another day.)
For a purpose of this discussion, let’s only demeanour during that 350,000,000 unit NET brief position. Consider a distance of that position and afterwards do a elementary math of realizing that a $1 pierce in possibly instruction means a $350MM trade benefit or trade detriment for these Bank desks.
Now, removing behind to a pretension of this post and The Banks enterprise to keep a china cost subsequent a 200-day relocating average. Why is this so vicious to them? Again, it’s fervour and profit.
As we can see below, on only 3 prior occasions in 2017, cost has been means to quickly pierce above a vicious 200-day MA. In February, a successive convene in cost was about 60¢. In April, a pierce was scarcely matching yet in August, cost changed over $1 in dual weeks once a 200-day was breached.
So given urge a 200-day again now? First and foremost, The Banks (because of their large NET brief position) do NOT wish a convene into year finish that competence prompt even some-more seductiveness and swindler shopping into 2018. More vicious yet is a elementary fervour cause as another $1 pierce adult in cost would be a $350MM paper detriment opposite their net brief position!
Though a draft above clearly betrays The Banks collusive and manipulative trade settlement for 2017, a draft subsequent unequivocally brings it into concentration in a present. Note a capping given cost was damaged subsequent a 200-day on Sep 21. We’ve drawn ELEVEN arrows on this draft to indicate we to transparent instances of Bank involvement to supply cost behind subsequent a 200-day MA. Note, too, how frequently a one day tighten above a 200-day is met with a large red candle a next.
So, for now, a indicate of this is simple. While we design US dollar debility to prompt a decent year for china and all metals and line in 2018, until Comex china can mangle giveaway of a Bank shackles during a 200-day relocating average, cost will sojourn stranded in neutral. This will have an impact on mining share prices, too, so anyone meddlesome in a zone should be certain to watch silver’s 200-day relocating normal all by a month of December. – Craig Hemke
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