11 March 2017 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded quietly lower in Far East trading on their Friday — and
back below $1,200 spot, with the low tick of the day printed about ten
minutes before the London open. It crept higher from there until at, or just
after, the noon GMT silver fix. It was sold a bit lower from there — and
about ten minutes before the COMEX open, it began to rally with some real
authority, but ran into the usual long sellers and short buyers of last
resort. The price was capped minutes after 9 a.m. EST — and was sold down a
bit until around 11:30 a.m. in New York. It began to creep higher starting at
12:15 p.m. EST — and this slow, but steady rally lasted right into the 5:00
p.m. close in the thinly-traded after-hours market.
With the gold price trading within a ten dollar price range once again,
the high and low ticks aren’t worth looking up.
Gold finished the Friday session in New York at $1,204.50 spot, up $3.70
on the day. Net volume was of the sky-high variety at around 223,000
contracts.
Here’s the 5-minute gold tick chart courtesy of Brad — and although it’s
not obvious at first glance, there wasn’t much in the way of background
volume yesterday. The scale is what it is because of the 14,000+ contract
volume spike that occurred right at 6:30 a.m. Denver time…8:30 a.m. in New
York. It was a busy day in the gold market yesterday.
The silver price was forced to follow a similar pattern as gold on Friday
— and throughout the entire session from one end to the other…virtually tick
for tick. I shan’t bother embellishing my silver commentary more than that.
The low and high ticks in this precious metal were reported by the CME
Group as $16.855 and $17.105 in the May contract.
Silver was closed in New York yesterday afternoon at $17.015 spot, up 7.5
cents from Thursday. Net volume was pretty heavy at just under 69,000
contracts.
Here’s the 5-minute tick chart for silver from Brad — and as you can see
at a glance, all the volume that mattered occurred during the COMEX trading
session…complete with its own big volume spike around 6:30 a.m. MST/8:30 a.m.
EST.
Like for the 5-minute tick chart for gold, the vertical gray line is 10:00
p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time
[CST] the following afternoon in Shanghai—and don’t forget to add two hours
for EST. The ‘ click to enlarge‘ feature is a must as well.
The platinum price chopped quietly sideways a dollar or so either side of
unchanged during Far East trading on Friday. It rallied about 5 bucks after
the Zurich open — and then chopped sideways until the noon silver fix. After
that, its price pattern was very similar to both silver and gold, with both
rallies in morning trading in New York getting squashed before the could get
very far. Then, around 11:30 a.m. EST, the platinum price began to inch
higher — and that really picked up speed once the COMEX closed. Platinum
finished the day at $941 spot, up 8 bucks from Thursday.
The palladium price really didn’t do much of anything, although it traded
mostly lower by a dollar or two until the COMEX open. Its rally at that
juncture was cut off at the knees shortly after 9 a.m. in New York — and it
quietly chopped lower from there…back into negative territory by shortly
after 1 p.m. EST. It rallied back to unchanged…$746 spot…by the 5 p.m. close.
The dollar index closed very late on Thursday afternoon in New York at
102.03 — and began to head lower as soon as trading began at 6:00 p.m. EST a
few minutes later. After shedding about 15 basis points, the index wandered
sideways until the job numbers came out at 8:30 a.m. in New York. The dollar
fell to about the 101.42 mark before getting rescued by the usual ‘gentle
hands’ at precisely 9:00 a.m. It ‘rallied’ about 15 basis points or so — and
began to head lower shortly after the equity markets opened in New York. The
101.17 low tick was set at 3:30 p.m. EST — and it certainly looked like the
‘gentle hands’ reappeared to guide the dollar index higher into the close.
The index finished the day at 101.38 — down 65 basis points on the day.
With strong hints from Mnuchin in Europe yesterday about wanting a weaker
dollar, that event may be in the cards, despite this baked-in-the-cake
interest rate increase next Wednesday.
Here’s the 6-month U.S. dollar index charts — and you can read into it
whatever you wish.
The gold stocks opened slightly above unchanged — and then chopped
sideways until around 11:20 a.m. in New York trading. They began to head
higher from there — and topped out at 3:30 p.m. when the ‘mystery’ rally in
the dollar index began [and gold ticked lower] at that moment. The HUI
finished higher by 2.91 percent.
The silver equities opened up a percent and change — and then chopped lower
to a hair above unchanged by 11:20 a.m…when both silver and gold prices began
to inch higher for the rest of the Friday session. The silver stocks also
topped out at 3:30 p.m. EST when the dollar index turned higher, although the
silver price was barely affected. Nick Laird’s Intraday Silver
Sentiment/Silver 7 Index closed higher by 2.55 percent. Click to enlarge
if necessary.
And here are three charts from Nick that shows the unhappy news for the
week, month — and year-to-date. The first one shows the changes in gold,
silver, platinum and palladium for the past week, in both percent and dollar
and cents terms, as of Friday’s closes in New York — along with the changes
in the HUI and Silver Sentiment/Silver 7 Index. The Click to Enlarge
feature really helps on all three.
And the chart below shows the month-to-date changes as of Friday’s close.
And here are the year-to-date changes. All the gains are mostly gone in
the HUI and the Silver 7 indexes.
And I’m still looking for an explanation as to whey the metals are
outperforming their underlying equities.
But on the bright side, it certainly wouldn’t take much of a price rally
in either silver or gold to ignite the precious metal equities — and make
these charts look a lot better in a real hurry.
The CME Daily Delivery Report was a surprise, as it showed that
zero gold — and only 3 silver contracts were posted for delivery within the
COMEX-approved depositories on Tuesday. ADM was the short/issuer out of its
client account — and JPMorgan was the stopper for its own account on all 3
contracts. I shan’t bother linking this amount. If this tiny delivery at this
time of month isn’t a sign of tightness, I don’t know what it is.
The CME Preliminary Report for the Friday trading session showed
that gold open interest in March fell by 3 contracts, leaving 28 still
around. Thursday’s Daily Delivery Report showed that 2 gold contracts were
actually posted for delivery on Monday, so that means that 3-2=1 contract
holder in gold covered and departed the March delivery month. Silver o.i.
in March declined by 132 contracts, leaving 1,148 contracts still open,
minus the 3 contracts mentioned in the previous paragraph. Thursday’s Daily
Delivery Report showed that 135 silver contracts were posted for delivery on
Monday, so that means that another 135-132=3 silver contracts were added
to the March delivery month. That was a surprise.
I know that Ted will have much more to say about ‘all of the above’ in his
weekly commentary this afternoon
There was another withdrawal from GLD yesterday, as an authorized
participant took out a chunky 285,663 troy ounces. And as of 7:47 p.m. EST
yesterday evening, there were no reported changes in SLV.
I would suspect that all the SLV shares being dumped are being accumulated
by JPM — and at some point we’ll see a rather large withdrawal. That would be
a sure sign that one of Ted’s “exchanges for physical” had just occurred.
Once again there were no reported sales from the U.S. Mint.
Month-to-date mint sales are even more putrid this month than they were
this time last month. So far they’ve sold only 4,500 troy ounces of gold
eagles — and 280,000 silver eagles. And they still haven’t sold a single
solitary 1-ounce 24K gold buffalo so far in March.
It was another very quiet day for physical movement in gold over at
the COMEX-approved depositories on Thursday. Nothing was reported
received once again — and only 399 troy ounces were shipped out…all from
Delaware. There was some shift from Registered back into Eligible — and most
of that occurred at HSBC USA…to the tune of 54,401 troy ounces. The link to
this ‘activity’…such as it is…is here.
Not surprisingly, it was another busy day in silver, as the
tightness in the March delivery month continues unabated. There was one
container load…599,942 troy ounces…shipped into JPMorgan — and 1,196,915 troy
ounces shipped out, with 1,100,110 troy ounces coming out of HSBC USA. The
remaining ‘out’ activity was 96,000-odd ounces from Canada’s Scotiabank.
There was also a container load…596,571 troy ounces…transferred from the
Eligible to the Registered category over at CNT — and that is certainly
slated to be delivered in March…most likely JP Morgan-bound! The link to all
that action is here.
JP Morgan’s total physical stash on the COMEX is now sitting at 92.35
million troy ounces — and should be pretty close to the 100 million ounce
mark by the time they’ve taken delivery of all the silver they’ve stopped —
and have yet to stop — in the March delivery month.
It was fairly busy over at the COMEX-approved gold kilobar depositories
in Hong Kong on their Thursday. They reported receiving 2,728 of them —
and shipped out 876. All of this activity was at Brink’s, Inc. as per usual —
and the link to that, in troy ounces, is here.
The Commitment of Traders Report, for positions held at the close
of COMEX trading on Tuesday, certainly showed improvements in the commercial
net short positions in both silver and gold, but not as much improvement in silver
as was expected. It was very decent in gold, however.
In silver, the Commercial net short position only decreased by
2,148 contracts, or 10.7 million troy ounces of paper silver. The commercial
net short position still sits at a monstrous 529.3 million troy ounces of
paper silver.
The commercial traders arrived at the 2,148 contract reporting week change
by decreasing their short position by 5,455 contracts, but they also
decreased their long position by 3,307 contracts — and the difference between
those two numbers is the change for the reporting week.
Ted said that the Big 4 traders decreased their short position by only
about 1,000 contracts — and all of that he attributes to JP Morgan. [He puts
their current short position at 29,000 COMEX contracts, down 1,000 from the
previous week’s report. And with the new Bank Participation Report in hand
yesterday, he didn’t make any changes to JPMorgan’s short position based on
this updated data.] He said that the ‘5 through 8’ large traders decreased
their short position by around 700 contracts — and his raptors, the
commercial traders other than the Big 8, decreased their short position by
about 400 contracts during the reporting week.
Under the hood in the Disaggregated COT Report, the Managed Money traders
only made up 1,444 contracts of the 2,148 contract change for the reporting
week. They only decreased their long position by 1,546 contracts, a very tiny
change — and, oddly enough, the also reduced their short position by
102 contracts. The difference between those two numbers is their 1,444
contract change for the reporting week. The 700-odd contract difference came
courtesy of the traders in the Other Reportables and Nonreportable/small
trader categories.
Ted’s “Has the Worm Turned” hypothesis in silver is still
very much in play based on this data, because the Managed Money Traders
barely reduced their long positions during the reporting week, plus they
covered some shorts as well. We’ll have to wait until next Friday’s report to
see how his hypothesis is doing, but lots can happen between now and then —
and probably will.
Here’s the 3-year COT chart — and as you can see for yourself, this week’s
changes are barely noticeable in the grand scheme of things. Some would be
surprised by this tiny change, as most were expecting more, especially since
the 200-day moving average was broken to the downside during the reporting
week. But with Ted’s hypothesis now a work in progress, this tiny change fits
in perfectly. Undoubtedly, there has been further improvement in silver since
the Tuesday cut-off, as the 50-day moving average also got taken out with
some authority. But who will be the long sellers and short buyers in next week’s
report — and by how much? That will tell all. Click to enlarge.
In gold, the weekly changes were far more traditional, as Ted’s
“Worm Has Turned” thesis is not in play with this precious metal.
The commercial net short position in gold declined by 27,259 contracts, or
2.73 million troy ounces of paper gold. That takes the commercial net short
position down to 15.26 million troy ounces.
Ted said that the Big 4 traders reduced their short position by about
5,700 contracts, the ‘5 through 8’ large traders reduced their short
positions as well, by around 5,400 contracts. And Ted said that the raptors,
the commercial traders other than the Big 8, not only closed out their
remaining 5,900 short contracts, but they also went long to the tune of
around 10,300 contracts.
Under the hood in the Disaggregated COT Report, it was almost all a
Managed Money affair, as they decreased their long position by 16,160
contracts, plus they added 7,839 short contracts, for a total weekly swing of
23,999 contracts. The remaining 3,400 contract change between that number —
and the commercial net short position came, as it always does, from the
trading in the other two categories…the ‘Other Reportables’ and the Nonreportable/small
trader category.
Here’s the 3-year COT chart for gold — and the change looks far more
reassuring. But don’t forget that the internal dynamics in silver and gold in
the COMEX futures market are miles apart. That’s why the big difference
between what happened in silver and gold during the reporting week. Click
to enlarge.
Ted and I would have loved to have a had an updated COT report yesterday
that showed the changes as of the close of COMEX trading on Friday, as he’d
know immediately what the Managed Money traders in silver had done with their
long positions. There are still two more trading days left in the reporting
week — and another week before the next COT Report. Between now and then we
get the FOMC meeting — and the unfolding U.S. debt ceiling fiasco. Next
week’s report is a lifetime away at the moment.
Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s
COT data for positions held at the close of COMEX trading on Tuesday. It
shows the days of world production that it would take to cover the short
positions of the Big 4 — and Big ‘5 through 8’ traders in each physically
traded commodity on the COMEX. These are the same Big 4 and ‘5 through 8’
traders discussed in the COT Report above. Click to enlarge.
For the current reporting week, the Big 4 are short 153 days of world
silver production—and the ‘5 through 8’ traders are short an additional 55
days of world silver production—for a total of 208 days, which is seven
months of world silver production, or about 505.4 million troy ounces of
paper silver held short by the Big 8. [In last week’s report the Big 8 were
short 212 days of world silver production.]
In the COT Report above, the Commercial net short position in silver is
529.3 million troy ounces. So for the fourth week in a row, the commercial
net short position is larger than the short position held by the Big 8
traders — to the tune of 529.3 – 505.4 = 23.9 million troy ounces…give or
take. What that means in plain English is that Ted’s raptors, the commercial
traders other than the Big 8, are now net short in silver, after being net
long for what seemed like forever.
As stated in the COT Report, Ted pegs JP Morgan’s short position at around
29,000 contracts, or 145 million ounces, which is down from the 30,000
contracts/150 million ounces they were net short a week ago. 145 million
ounces works out to around 60 days of world silver production that JPMorgan is
short. That’s compared to the 208 days that the Big 8 are short in total.
The approximate short position in silver held by Scotiabank works out
to around 53 days of world silver production. For the fourth week in a
row, JP Morgan is the number one short holder in silver in the COMEX futures
market.
The two largest silver shorts on Planet Earth—JP Morgan and Canada’s
Scotiabank—are short about 113 days of world silver production between the
two of them —and that 113 days represents 74 percent of the length of the
red bar in silver in the above chart…three quarters of it! The other two
traders in the Big 4 category are short, on average, about 20 days of world
silver production apiece. The four traders in the ‘5 through 8’ category are
short, on average, a bit under 14 days of world silver production apiece.
The short positions of Scotiabank and JP Morgan combined, represents about
54 percent of the short position held by all the Big 8 traders combined.
How’s that for a concentrated short position within a concentrated short
position?
The Big 8 are short 52.6 percent of the entire open interest in silver
in the COMEX futures market — and that number would be close to 60
percent once the market-neutral spread trades are subtracted out. In gold
it’s 37.5 percent of the total open interest that the Big 8 are short.
In gold, the Big 4 are short 40 days of world gold production, down
from 42 days last week — and the ‘5 through 8’ are short another 18 days of
world production, which is down from 20 days from the prior week, for a total
of 58 days of world gold production held short by the Big 8. Based on these
numbers, the Big 4 in gold hold about 69 percent of the total short position
held by the Big 8. How’s that for a concentrated short position within a concentrated
short position? At least it’s not quite as bad as silver in that regard, but
close enough to be considered the same, which is outrageous.
The “concentrated short positions within a concentrated short position” in
silver, platinum and palladium held by the Big 4 are about 73, 75 and 71
percent respectively of the short positions held by the Big 8. All these
percentages are unchanged from last week’s COT Report — and the week before
that, as well.
The March Bank Participation Report [BPR] data is
extracted directly from the above Commitment of Traders Report. It shows
the COMEX futures contracts, both long and short, that are held by all the
U.S. and non-U.S. banks as of Tuesday’s cut-off. For this one day a month
we get to see what the world’s banks are up to in the COMEX futures market,
especially in the precious metals—and they’re usually up to quite a bit.
In gold, 5 U.S. banks are net short 54,899 COMEX contracts in the
March BPR. In February’s Bank Participation Report [BPR], that number was
53,915 contracts, so they’ve increased their collective short positions by a
smallish 1,000 contracts or so during the reporting period. Three of the five
banks would certainly include JPMorgan, HSBC USA and Citigroup. As for who
the fourth and fifth banks might be—I haven’t a clue, but I doubt very much
if their positions, long or short, would be material.
Also in gold, 31 non-U.S. banks are net short 48,559 COMEX gold contracts,
which isn’t much per bank. In the February BPR, 27 non-U.S. banks were net
short 41,868 COMEX contracts, so the month-over-month change showed an
increase of 6,691 contracts. And it’s still a mystery as to which non-U.S.
bank in the Big ‘5 through 8’ category got bailed out of their huge short position
in gold in July of last year. I’m suspecting it could be Canada’s
Scotiabank, but I could be wrong about that.
As of this Bank Participation Report, 36 banks are net short 23.8
percent of the entire open interest in gold in the COMEX futures market,
which is a tiny increase from the 23.1 percent they were short in the
February BPR.
Here’s Nick’s chart of the Bank Participation Report for gold going back
to 2000. Charts #4 and #5 are the key ones here. Note the blow-out in the
short positions of the non-U.S. banks [the blue bars in chart #4] when
Scotiabank’s COMEX gold positions [both long and short] were outed in October
of 2012. Click to Enlarge is a must.
In silver, 5 U.S. banks are net short 31,830 COMEX silver
contracts—and it was Ted’s calculation from yesterday that JPMorgan holds
around 29,000 of those silver contracts net short on its own — which is about
91 percent of the entire net short position shown in this month’s BPR. This
means that the remaining 4 U.S. banks aren’t net short by much — and a couple
of them might actually be net long! In February’s BPR, the net short position
of these five U.S. banks was 26,554 contracts, so there’s been an increase of
5,276 contracts in the net short positions of the U.S. banks since then — and
JPMorgan probably owned all of that increase. As Ted says, JPMorgan is the
‘Big Kahuna’ in silver as far as the U.S. banking system is concerned. No
kidding!
Also in silver, 20 non-U.S. banks are net short 36,306 COMEX contracts—and
that’s down 1,167 contracts from the 37,473 contracts that these same
non-U.S. banks held short in the February BPR. I’m still prepared to bet big
money that Canada’s Scotiabank is the proud owner of the lion’s share of this
short position—somewhere between 65 and 75 percent of the above number. That
most likely means that a number of the remaining 19 non-U.S. banks might
actually be net long the COMEX silver market by a bit. But even if they
aren’t, the remaining short positions divided up between these remaining 19
non-U.S. banks, are immaterial — and have always been so.
As of this Bank Participation Report, 25 banks are net short 35.4
percent of the entire open interest in the COMEX futures market in
silver—which is up from the 33.0 percent that they were net short in the
February BPR — with much more than the lion’s share of that held by only two
banks…Canada’s Scotiabank and JP Morgan.
Here’s the BPR chart for silver. Note in Chart #4 the blow-out in the
non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank
was brought in from the cold. Also note August 2008 when JPMorgan took over
the silver short position of Bear Stearns—the red bars. It’s very noticeable
in Chart #4—and really stands out like the proverbial sore thumb it is in
chart #5. Click to enlarge.
In platinum, 5 U.S. banks are net short 14,119 COMEX contracts in the
February Bank Participation Report. In the February BPR, these same banks
were short 14,526 COMEX platinum contracts, so there’s been almost no meaningful
change in the U.S. banks’ short position from the prior month.
I suspect that, like in silver and palladium, JP Morgan holds virtually
all of the platinum short position of the 5 U.S. banks in question.
Also in platinum, 17 non-U.S. banks are net short 8,930 COMEX
contracts, which is down a smallish 459 contracts from the 9,389 contracts
they were net short in the February BPR. Their short positions are most
likely immaterial compared to the short positions held by the 5 U.S.
banks…or, more likely, 1 or 2 U.S. banks.
If there is a large player in platinum among the non-U.S. banks, I
wouldn’t know which one it is. However I’m sure there’s at least one big one
in this group. The reason I say that is because before mid-2009 when the U.S.
banks showed up, the non-U.S. banks were always net long the platinum market
by a bit—see the chart below—and now they’re net short. The remaining 16
non-U.S. banks divided into whatever contracts are left, isn’t a lot, unless
they’re all operating in collusion—which I doubt. But from the numbers it’s
easy to see that the platinum price management scheme is an American show as
well, with one big non-U.S. bank possibly involved. Scotiabank perhaps.
And as of February’s Bank Participation Report, 22 banks are net short
33.8 percent of the entire open interest in platinum in the COMEX futures
market, which is down a bit from the 36.9 percent they were collectively net
short in the February BPR. The ‘click to enlarge‘ feature is a must here as well.
In palladium, 4 U.S. banks were net short 6,722 COMEX contracts in the
March BPR, which is down 673 contracts from the 7,395 contracts they held net
short in the February BPR.
Also in palladium, 13 non-U.S. banks are net short 3,864 COMEX
contracts—which is an increase of 817 contracts from the 3,047 COMEX
contracts that these same banks were short in the February BPR. When you
divide up the short positions of the non-U.S. banks more or less equally,
they’re mostly immaterial, just like they are in platinum.
But, having said all that, as of this Bank Participation Report, 17
banks are net short 37.8 percent of the entire COMEX open interest in
palladium. In February’s BPR, the world’s banks were net short 35.6 percent.
Here’s the palladium BPR chart. You should note that the U.S. banks
were almost nowhere to be seen in the COMEX futures market in this metal
until the middle of 2007—and they became the predominant and controlling
factor by the end of Q1 of 2013. But their footprint is much smaller now.
However, I would still be prepared to bet big money that, like platinum and
silver, JPMorgan holds the vast majority of the U.S. banks’ short position in
this precious metal as well. Click to enlarge.
As I say every month at this time, there’s a maximum of three U.S.
banks—JPMorgan, HSBC USA and Citigroup—along with Canada’s Scotiabank—that
are the tallest hogs at the precious metal price management trough. However,
it’s also a fact that one of the non-U.S. banks in the Big ‘5 through 8’
category got bailed out of its COMEX short position in gold in July of last
year.
But JP Morgan and Canada’s Scotiabank still remain the two largest
silver short holders on Planet Earth in the COMEX futures market, with JP
Morgan momentarily in the #1 spot. I would suspect that might apply to gold
as well, although it may not in the case of Scotiabank, if the non-U.S. bank
that got bailed out in July turns out to be them. The jury, as I said further
up, is still out on that one.
I have an average number of stories for you today, including a fair
number that have been sitting in my in-box awaiting my Saturday column. I
hope you have enough time in what’s left of your weekend to watch/listen/read
the ones that interest you.
It certainly was an interesting day from a price
perspective in all four precious metals perspective on Friday. It’s
impossible to tell whether the lows were in or not — and if they’re not,
they’re not far off. The precious metal equities certainly were on a tear
Of course it’s what happens on Wednesday after the FOMC meeting that
should indicate where we go from here, but to put a stake in the ground about
it at this moment in time, would be more than premature.
So we wait some more.
Here are the 6-month charts for all four precious metals, plus copper,
once again — and the most important is the silver chart, at least from a
price perspective. But from a March delivery perspective, things have never
been tighter — and I must admit that I can hardly wait to see what Ted has to
say about it later today — and I’ll steal what I think I can get away with
for my column on Tuesday. The click to enlarge feature helps a bit with the first
four charts.
And once more, here’s the 6-month chart for WTIC, as it closed below $50
the barrel yesterday.
The current state of the world’s financial system could hardly be more
egregious. I know from reading Doug’s Credit Bubble Bulletin further
up, that even he is lost for words as to how to describe it. But there should
be no doubt that the world’s largest financial bubble in history continues to
expand in all directions. What pin awaits it in the future is not apparent —
and it’s “pedal to the metal” in all directions at the moment.
Returning to the COMEX silver market briefly, I snatched a few more
words from silver
analyst Ted Butler‘s Wednesday missive… “I am thunderstruck when
observing just how much stronger the control of the COMEX has grown with each
passing day.
There is no shortage of evidence that what happens in COMEX futures contract
positioning has become the prime, if not sole driver of price. It can be seen
in the almost universal attention paid to the current near-record bearish
market structure in COMEX silver, where the last COT report indicated massive
managed money long and commercial short positions. Never have I seen more
specific references to this highly-specialized fact of market life. Most
remarkable of all is that the attention to the COMEX market structure is
well-deserved and justified .”
But whether or not things will play out in silver the way they have in
the past, is still not known. Will the Managed Money traders dump longs and
go short during this engineered price decline? They certainly didn’t do much
in yesterday’s COT Report, only reducing their gigantic long position by
1,546 contracts — and not only did they not add to their short position, they
actually reduced it by 102 contracts. That was on a price decline of just
about a dollar — plus the 200-day moving average fell during the reporting
week as well. If that didn’t induce them to sell, will have blasting through
the 50-day moving average on Thursday made any appreciable difference?
I’m sure that there has been some Managed Money long selling/shorting
during the reporting week in progress…but how much? And if they’re not
prepared to dump any more longs or go short to any great degree from here,
then how are the commercial traders going to be able to cover their monstrous
short positions?
Of course this doesn’t affect JP Morgan, because they have more than
enough physical silver to cover their remaining short position if need be.
This is a drama playing out in real time and, concurrently, we have the
ongoing and extremely tight March delivery month in the metal itself, which
Ted pointed out, is a different situation entirely.
You couldn’t make this stuff up!
Something has to give at some point regarding silver — and sometime
between now and the end of this month, I expect their to some sort of
denouement, as this situation can’t remain like this more much longer.
“Beware the Ides of March“…indeed!
|
Steer's involvement with precious metals began in 1999 -- and from
2008 to 2015 wrote the daily gold commentary at Casey Research. Since June
of 2015...Ed has been publishing his daily column on his own subscription
website at www.edsteergoldandsilver.com. Ed is also a board member of
GATA...the Gold Anti-Trust Action Committee, Inc.
|
The author is not affiliated with, endorsed or sponsored by Sprott
Money Ltd. The views and opinions expressed in this material are those of the
author or guest speaker, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.