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LETMYSILVERGO
8th December 2008, 15:25
On the fly" Gold And Silver COT Information

http://www.resourceinvestor.com/pebble.asp?relid=48524


By Gene Arensberg
08 Dec 2008 at 11:50 AM GMT-05:00

U.S. banks dominate COMEX short positions for gold, silver--startling gold and silver COT information.
ATLANTA (ResourceInvestor.com) -- The Commodities Futures Trading Commission (CFTC) releases its Bank Participation in Futures Markets Report once a month on the first reporting week of the month. The figures for December are out and they are a shocker.

For background, refer to a previous article of mine at this link. As of December 2, as gold closed at $783.39, the CFTC reported that 3 U.S. banks had a net short positioning for gold on the COMEX, division of NYMEX, of 63,818 contracts. The CFTC also reported that as of the same date all traders classed by the CFTC as commercial held a collective net short positioning of 95,288 contracts.

That means that just three U.S. banks accounted for 66.97% of all the commercial net short positioning on the COMEX for gold futures. Here’s what the three U.S. banks’ positioning looks like on a graph:

Source CFTC for Bank Participation, Cash Market for gold.

(Note: Those with text-only email will not be able to see the graphs in this memo. If you want them, please email and I'll send them in an attachment.)

That is one hell of a dominant position in gold futures on the COMEX held by so few entities. For a little context, the net short positioning of the big U.S. banks represents a net short positioning of just under 6.4 million ounces (just under 200 tonnes). As of December 4, there were 2,918,028 ounces classed as “Registered” in COMEX warehouses. So, these 3 U.S. banks were net short 218% of the amount of deliverable gold from ALL COMEX members which use the COMEX warehouses.

Silver

For silver, it’s even more startling. On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening 98.64% of all the collective commercial net short positioning on the COMEX, division of NYMEX in New York.

Here’s what the miscreant banks’ positioning looks like on a graph:

Source CFTC for Bank Participation, Cash Market for silver.



Exactly two U.S. banks have practically all the COMEX commercial net short positioning on silver. For a little context, 24,555 net short contracts means that the two banks held net short positions on December 2 for 122,775,000 ounces of silver with silver at $9.57. The COMEX said on December 4, that there were 80,239,857 ounces total in the “Registered” category, so these 2 malefactor banks held net short positioning equal to about 153% of the amount of deliverable silver in ALL the COMEX members’ accounts.

And people wonder why both silver and gold moved into backwardation over the past two or three weeks? People are apparently worried that they won’t be able to take delivery of gold or silver metal from the COMEX in the future. They'll pay a premium now to get it now.

How is it possible that the CFTC and the SEC continues to look the other way as a couple big Fed member banks continue to overwhelm the market with the weight of their own trading?

Due to tight time constraints, that’s all for now, but here's the latest update to the bullion premium charts, as reported by the Coin Dealer Newsletter.

JoeSixPack
8th December 2008, 15:44
Good article.

Actually the two graphs below the article are also interesting. One shows the premium over spot for 1 oz gold eagles, the other for 90% silver. Both start in Jan. 2006.

main1event
8th December 2008, 20:49
These banks should have to prove they have the silver to deliver. Secondly there is no reason they should be shorting that many contracts, thats relatively 30% of the entire yearly supply of silver. A concentrated short position between three individual banks.

If you or I were to be able to do that, we'd be taken up on charges.

research24
8th December 2008, 21:59
What we are all now praying for is the collapse of a fascist state, not a miraculous return of integrity to hopelesssly corrupt people. The later will never happen. The former is in progress.

valerb
9th December 2008, 06:28
Silver

For silver, it’s even more startling. On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening 98.64% of all the collective commercial net short positioning on the COMEX, division of NYMEX in New York.



I believe the number you are coming up with is by subtracting all commercial longs from the commercial shorts. Assuming that is the case, that would not be a valid number. Many of the commercial longs are not also short, so the number of shorts would be higher and I don't know if anyone outside of NYMEX would know what that number would be. It's still lopsided for sure, but don't forget about the Large and small speculators, they account for a sizable amount of shorts as well.