Banks Shorting Gold & Silver?
The missing Bank Participation Report [for positions held at the end of trading on Tuesday, November 3rd] put in an appearance late yesterday afternoon. Here's the Reader's Digest version... In silver, two [2] U.S. banks [JPMorgan and HSBC USA] are short 41,318 Comex contracts. They also show 1,426 long positions... for a net short position of 39,892 Comex contracts... which represents 30.9% of the entire Comex open interest in silver. Taking out all the market-neutral spread trades would drive this percent of open interest [on the short side] to around 45%... and that's just two U.S. banks!!! That's preposterous!!! If that 45% is true, then it means that JPMorgan and HSBC hold virtually the entire Comex net short position all by themselves.
Now for silver and the non-U.S. banks. There are currently eight [8] non-U.S. banks that hold Comex positions... 2,155 long contracts and 1,578 short contracts. These 8 banks are net long 577 Comex contracts... and these contracts represent 0.45% of total open interest.
In gold, two [2] U.S. banks [JPMorgan and HSBC USA] are short 123,331 Comex gold contracts. They also hold 523 long Comex contracts. Their net short position in gold is 122,808 Comex contracts. These two above banks hold 24.9% of the entire open interest in Comex gold... all of it held short. If I take out the market-neutral spread trades, these two U.S. bullion banks are short more than 30% of the entire Comex gold market.
Now, for the non-U.S. bullion banks, of which there are 18 in total that hold Comex gold contracts. They are long 7,914 contracts and short 39,340 Comex contracts. Their net short position is 31,426 Comex contracts spread over 18 banks. This represents 6.4% of the total open interest... but well under 1% for each of the 18 non-U.S. banks. Not that I want to muddy the water at this point, but I would bet a fair chunk of money that of the 31,426 Comex contracts held short by those 18 non-U.S. banks... 75% of that amount is held by less than a third of those 18 banks.
In a nutshell, as of the end of trading last Tuesday [a week ago today], JPMorgan and HSBC USA were short 199.5 million ounces of silver and 12.3 million ounces of gold... about 45% and 30% of total [net] Comex open interest respectively. And the CFTC and your gold and silver companies just sit on their respective asses and do nothing.