Serpo
10th June 2013, 12:56 PM
Caught flatfooted and enormously short paper metal at the initiation of QE∞, a deliberate and calculated plan has been orchestrated by the major Bullion Banks, in particular JPMorgan.
By driving price the price of gold almost $400 lower, The Gold Cartel has been able to reduce their general liability by nearly 80% (http://www.tfmetalsreport.com/blog/4750/speechless-turd) and, by virtue of the latest Bank Participation Report, some Bullion Banks have been able to move NET LONG for the first time in over a decade.
If reports are correct the JPM has flipped from 50,000 net short to 50,000 net long, we must conclude that the operation to smash gold is close to complete.
However, even though silver has been smashed a greater price percentage than gold, JPM has been been blunted in their attempts to completely cover their net short silver position as the "other commercials" (who at least on the surface don't appear to be JPM itself) have added at least 20,000 more longs than they have historically ever carried.
And notice that the gross long position shown above has continued to rise, even in the face of sharply lower prices over the past eight weeks. These are some very deep pockets that, clearly, are not being shaken out. Instead of selling on further weakness, they continue to add.
JPM could attempt to jam silver prices even lower in an increasingly desperate attempt to frighten these longs but at what cost? By doing so they lose big on their gold position and further exacerbate their already tenuous physical/deliverable gold position.
And it is this "juggling act" that leads me to think that this entire operation, which began a brutally-long nine months ago, is nearly finished.
You see, by moving so deeply long in gold futures, JPM has effectively hedged much of the remaining silver short position that they've been unable to cover. At its most basic level...if they are forced to cover silver into a rising price, the potential losses they'd incur will be more than equaled by the gains they'd show in gold. (Just for fun...If you're long 50,000 contracts and price rises $500 back to the August 2011 highs, you make $2.5B!)
Now, all of this is well and good and NO DOUBT foreshadows much higher prices for both metals in the weeks ahead. However, none of this is going to matter much to the Spec HFTs which are expected to pounce on the metals this evening, particularly in silver. The fact that China is "closed" through mid-week will only serve to exacerbate the paper price volatility. However, IF I'm right about the ideas laid out above, price should show surprising resilience this week. Gold has been very well bought each and every time that attempts have been made to drive it down through $1350. Let's see if this continues. Silver, too, has hung tough around $22 and has bounced back twice from "shock lows" near $21.
http://www.tfmetalsreport.com/blog/4768/getting-ready
Here is what Ted Butler had to say about this report today:
"Since the BPR of February 5, the US bank category position (in effect, almost exclusively JPMorgan) has swung by a net 100,000 contracts, from net short 70,000 contracts to net long 30,000 contracts (all rounded). There has never been a move of such magnitude before. Over that same time, the total net commercial short position (in the COT) declined by 113,000 contracts, meaning that JPMorgan accounted for almost 90% of the entire commercial decline. It is not possible for that extreme degree of concentration and market share not to be manipulation, pure and simple.
And here’s the manipulative icing on the cake – JPMorgan was able to flip a net short position in COMEX gold of 50,000 contracts in February to a net long position of 50,000 contracts on a gold price decline of as much as $350. I would submit that the singular purchase of 10 million ounces of gold (worth the equivalent of $15 billion) within four months on a greater than 20% price decline could only be accomplished if the price was manipulated lower by the purchaser. No other explanation would be possible...
JPMorgan’s emergence as the big COMEX gold long changes the dynamic of the gold market. In addition to conclusively proving that this is the most crooked and evil financial institution ever to exist, it confirms the extremely bullish set up for the gold price...
Of course, if JPMorgan can continue to accumulate inventory on lower prices, we will get lower prices temporarily. But having JPMorgan confirmed as being on the long side of gold is a game changer. That’s why I continue to throw money out the window on silver call options."
http://jessescrossroadscafe.blogspot.com.au/2013/06/cftc-gold-and-silver-bank-participation.html
By driving price the price of gold almost $400 lower, The Gold Cartel has been able to reduce their general liability by nearly 80% (http://www.tfmetalsreport.com/blog/4750/speechless-turd) and, by virtue of the latest Bank Participation Report, some Bullion Banks have been able to move NET LONG for the first time in over a decade.
If reports are correct the JPM has flipped from 50,000 net short to 50,000 net long, we must conclude that the operation to smash gold is close to complete.
However, even though silver has been smashed a greater price percentage than gold, JPM has been been blunted in their attempts to completely cover their net short silver position as the "other commercials" (who at least on the surface don't appear to be JPM itself) have added at least 20,000 more longs than they have historically ever carried.
And notice that the gross long position shown above has continued to rise, even in the face of sharply lower prices over the past eight weeks. These are some very deep pockets that, clearly, are not being shaken out. Instead of selling on further weakness, they continue to add.
JPM could attempt to jam silver prices even lower in an increasingly desperate attempt to frighten these longs but at what cost? By doing so they lose big on their gold position and further exacerbate their already tenuous physical/deliverable gold position.
And it is this "juggling act" that leads me to think that this entire operation, which began a brutally-long nine months ago, is nearly finished.
You see, by moving so deeply long in gold futures, JPM has effectively hedged much of the remaining silver short position that they've been unable to cover. At its most basic level...if they are forced to cover silver into a rising price, the potential losses they'd incur will be more than equaled by the gains they'd show in gold. (Just for fun...If you're long 50,000 contracts and price rises $500 back to the August 2011 highs, you make $2.5B!)
Now, all of this is well and good and NO DOUBT foreshadows much higher prices for both metals in the weeks ahead. However, none of this is going to matter much to the Spec HFTs which are expected to pounce on the metals this evening, particularly in silver. The fact that China is "closed" through mid-week will only serve to exacerbate the paper price volatility. However, IF I'm right about the ideas laid out above, price should show surprising resilience this week. Gold has been very well bought each and every time that attempts have been made to drive it down through $1350. Let's see if this continues. Silver, too, has hung tough around $22 and has bounced back twice from "shock lows" near $21.
http://www.tfmetalsreport.com/blog/4768/getting-ready
Here is what Ted Butler had to say about this report today:
"Since the BPR of February 5, the US bank category position (in effect, almost exclusively JPMorgan) has swung by a net 100,000 contracts, from net short 70,000 contracts to net long 30,000 contracts (all rounded). There has never been a move of such magnitude before. Over that same time, the total net commercial short position (in the COT) declined by 113,000 contracts, meaning that JPMorgan accounted for almost 90% of the entire commercial decline. It is not possible for that extreme degree of concentration and market share not to be manipulation, pure and simple.
And here’s the manipulative icing on the cake – JPMorgan was able to flip a net short position in COMEX gold of 50,000 contracts in February to a net long position of 50,000 contracts on a gold price decline of as much as $350. I would submit that the singular purchase of 10 million ounces of gold (worth the equivalent of $15 billion) within four months on a greater than 20% price decline could only be accomplished if the price was manipulated lower by the purchaser. No other explanation would be possible...
JPMorgan’s emergence as the big COMEX gold long changes the dynamic of the gold market. In addition to conclusively proving that this is the most crooked and evil financial institution ever to exist, it confirms the extremely bullish set up for the gold price...
Of course, if JPMorgan can continue to accumulate inventory on lower prices, we will get lower prices temporarily. But having JPMorgan confirmed as being on the long side of gold is a game changer. That’s why I continue to throw money out the window on silver call options."
http://jessescrossroadscafe.blogspot.com.au/2013/06/cftc-gold-and-silver-bank-participation.html