As we get ready to kickoff November, bullion bank gold shorts have now reached a staggering $38 billion.
October 30 (King World News) – London analyst Alasdair Macleod: Eric, there have been some interesting changes in the Commitment of Traders figures released tonight, shown in the table below.
Swaps And Producers/Merchants
First, the Swaps — otherwise known as the bullion bank trading desks. They increased their net short position by 9,878 contracts, while the Producers/Merchants cut their short positions by a net 7,540 contracts. This means that the bullion banks are shouldering more of the non-spec shorts, and their net exposure relative to Producers/Merchants has risen to 72%. It appears that on a weakening gold price they are less keen to hedge. And it could be that reports that the Chinese are buying gold doré direct from the mines, if true, has reduced the need of this category to hedge forward production anyway.
Bullion Banks Now Net Short $38 Billion Of Paper Gold
On the specs side, there is an interesting change. Hedge funds have increased their net long exposure by 11,310 contracts, and will be hurting in the selloff since Tuesday, when the price fell $40. The Other Reported category reduced its long position by 12,280 contracts. In effect, they supplied these contracts to the Managed Money category, while on the non- spec side, Producers/Merchants supplied shorts to the Swaps. The conclusion is that on Tuesday the bullion banks were even more short than last week, with net shorts standing at $38 billion, up about a billion. Whichever way the Comex contract moves, they remain trapped, and with a collapsing world economy leading to infinite monetary inflation, there is no escape.
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