Bullion banks have just taken losses on scarce physical gold, plus some hedge funds are also being caught in the short squeeze along with the bullion banks.
KWN has now released this week’s audio interview!
This following was sent to King World News exclusively by Alasdair Macleod immediately after the COT report was released, and what Macleod points out here is quite fascinating in terms of the struggle the bullion banks continue to face on their $38 billion short positions in the gold market:
KWN Exclusive: Bullion Banks Take Loss On Gold Shorts
August 7 (King World News) – Alasdair Macleod: The first table shows the position of the non-specs and the specs on 4 August.
The second table shows how these positions changed from the previous week.
Comments
Bullion Banks Take Losses On 124 Tonnes Of Scarce Physical Gold
The swaps have reduced their net shorts by 9,147 contracts, but then open interest (not shown) contracted by 36,792 contracts. By 4 August, 39,912 contracts had stood for delivery accounting for all the change in Open Interest, which means the swaps booked their losses on those.
Producers and Merchants cut their longs and added to their shorts, and in the process, they accounted for 31% of the shorts, reducing the swaps net shorts from 70% to 69% of the total.
The Swap’s outstanding position has improved marginally, but they will have booked losses on 124 tonnes of scarce physical gold, delivered out of their hands.
Hedge Funds Also Exposed To Gold Short Squeeze
The Managed Money category (hedge funds) increased their longs but increased their shorts even more for a lower net position overall of 3,664 contracts. This leaves their overall net longs only marginally above the long-term average, but their shorts are above the long-term average for Managed Money shorts. The lack of bullishness in this category is surprising, and some hedge funds are even exposed to a bear squeeze along with the Swaps.
Other Reported have increased their position marginally, but the net figure is not far from record levels. Interestingly, their record net longs were recorded when the gold price hit its March 20 low of $1455. This is where the smart money is hiding and is standing for delivery, so this increase of 5,609 contracts after taking delivery of 124 tonnes of gold is bullish.
Conclusion
Since the hedge fund category provides the liquidity for Swaps to close their bear positions and they have reduced their net long exposure, the market has tightened against the Swaps. And the smart money in Other Reported tells us the gold price should continue to rise.
KWN has now released this week’s audio interview!
To listen to the powerful audio interview where Alasdair Macleod discusses the possible collapse of the LBMA, trapped bullion bank gold shorts and much more click here or on the image below.
SILVER & GOLD VOLATILITY
***ALSO JUST RELEASED: SILVER & GOLD VOLATILITY: Relax And Have A Burger, Bull Market Has A Long Way To Go: “It is difficult for me to believe that a three week rally is all we get from a 5+ year base.” CLICK HERE.
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