In this week’s ‘Days to Cover’ chart, the Big 4 traders are short about 112 days of world silver production, down about 6 days from last week’s COT Report. The ‘5 through 8’ large traders are short an additional 50 days of world silver production, unchanged from last Friday’s report…which Ted pointed out on the phone yesterday…for a total of about 162 days that the Big 8 are short — down 6 days from last week’s COT Report.
That 162 days that the Big 8 are short, represents just about five and a half months of world silver production, or 347.0 million troy ounces of paper silver held short by the Big 8 commercial traders.
In the COT Report above, the Commercial net short position in silver was reported by the CFTC at 196.6 million troy ounces. As mentioned in the previous paragraph, the short position of the Big 4/8 traders is 347.0 million troy ounces. So the short position of the Big 4/8 traders is larger than the Commercial net short position by 347.0-196.6=150.4 million troy ounces…up 33.4 million troy ounces from last week’s COT Report…6,680 COMEX contracts…the number of long contracts purchased by Ted’s raptors during the past reporting week.
The reason for the difference in those numbers is that Ted’s raptors, the small commercial traders other than the Big 8, are net long silver by that amount…150.4 million troy ounces/30,080 COMEX contracts.
As per the first paragraph above, the Big 4 traders in silver are short around 112 days of world silver production in total. That’s 28 days of world silver production each, on average…down 1.5 days from last Friday’s report. The traders in the ‘5 through 8’ category are short 50 days of world silver production in total…about 12.5 days of world silver production each on average — and unchanged from last week’s COT Report.
The Big 8 traders are short 50.4 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 49.6 percent they were short in the last COT report — and that’s because of a huge drop in silver o.i. because of spread trade liquidation during the reporting week. And once whatever market-neutral spread trades are subtracted out, that percentage would certainly be over the 55 percent mark. In gold, it’s 46.2 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 47.9 percent they were short in last Friday’s COT Report — and a tiny bit over the 50 percent mark once their market-neutral spread trades are subtracted out.
In gold, the Big 4 are short 56 days of world gold production, down 3 days from last Friday’s COT Report. The ‘5 through 8’ are short 31 days of world production, unchanged from last week…for a total of 87 days of world gold production held short by the Big 8 — and obviously down 3 days from last Friday’s COT Report. Based on these numbers, the Big 4 in gold hold about 64 percent of the total short position held by the Big 8…down about 2 percentage points from last Friday’s COT Report.
The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 69, 79 and 75 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart. Silver is down about 1 percent from last week…platinum is up about 4 percentage points from a week ago — and palladium is unchanged week-over-week.
The status quo remains unchanged. The Big 4/8 traders are sitting there like a lump — and very firmly stuck on the short side in both gold and silver — although they did improve that situation during the reporting week in both silver and gold…but only the Big 4 in each. It was almost all a raptor affair once again…especially in silver — and it’s been that way for a very long time now.
As I keep pointing out — and will mention again, the Big 4/8 shorts will never be able to extricate themselves fully from the short side, if that was ever their intent…particularly the Big 4. At some point they’re going to have eat the lion’s share of the short positions that they currently hold. The only way that they can do that is to go into the market and buy longs…or deliver physical metal, but only if the long holders are in a position to accept delivery. Ted says that a lot of them aren’t.
So unless the powers-that-be at the CFTC and CME Group have something nefarious up their sleeves, or they’re bailed out by the likes of the Exchange Stabilization Fund, the U.S. Treasury or the Fed, their potential loses can only be imagined…think LME nickel times 20 or more, according to Ted. But I very much doubt that it will be allowed to happen, especially for the ‘too big to fail’ bullion banks in the Big 4 category.
As I’ve said before, what happened on the LME involving the nickel market will most likely be a template for what will occur over at the CME Group at some point, as they rush to protect the big shorts on any runaway price activity to the upside, as that’s their primary function.
But as of this moment, there are no upside daily limits as to how high gold and silver prices can rise in the COMEX futures market.
However, the circumstances in silver have been altered by an unimaginable [and monstrously bullish] amount by Ted’s discovery of the approximately 1 billion troy ounce physical short position in silver that Bank of America appears to hold in the OTC market…along with the big increase in Goldman’s derivatives position in silver in that market, as shown in the latest OCC Report for Q4/2021…which Ted figures is a long position.
He has also come to the conclusion that BofA is short about 30 million troy ounces of gold in the OTC market as well.
The situation regarding the Big 4/8 shorts in silver, gold [and platinum] continues to be far beyond obscene, twisted and grotesque — and as Ted correctly points out ad nauseam, its resolution will be the sole determinant of precious metal prices going forward.
As always, nothing else matters.