Silver: Commercial Short Positions Continue to Rise

The numbers are understandably ballpark, but the fact is that the Commercial Short Position on the COMEX has taken a 2.2 Billion dollar short position since July 31, 2009. Using the Closing silver value, multiplied by the ounces sold sort derives the figure.

And what deep pockets the shorts have, since that 2.2 Billion short position has lost an additional 256 Million dollars in value (with silver at 17.75). Since the Commercial Short positions have continued to rise (with the exception of 1 week) each week, the paper losses continue to mount. During this 10 week period surveyed, Commercial Long positions increased only 4 of the ten weeks and declined the other six.

Since July 31, 2009, the Commercial Short Position has risen from 65,000 contracts to nearly 91 thousand (almost 50%) at the same time the price of silver has gone from $14 to nearly $18. The Long side of things has seen a decline from 29 to 26 thousand contracts.

It is possible that the Shorts have finally been unable to cap the rally in silver with the continuing pressure from the falling dollar and the shift in world financial markets away from the dollar hegemony. In order to maintain downward pressure on the price, the Commercial Shorts will have to add more than 7,000 additional short contracts to keep up the pressure or figure out some way to give some support to the falling dollar.

Disclosure: Long GLD, SLV, Physical Metal, retirement accounts

Comments

[F. Bradeen:]

Just like the Bunker Hunt fiasco in 1980, the CFTC will be there to help the shorts (their buddies on the trading floor) by only allowing no new buys but only liqidations which collapsed the silver market. The CFTC is not your friend. Be careful.

Oct 09 07:33 AM

[sdavid0419:]

I'm playing silver a little differently from gold. I've been a coin collector for as long as I can remember. Since dealers are opting to sell silver bullion as bags of unsorted silver coins I have slowly been purchasing them. After I made my initial purchase of washington quarters I learned that there possibly were, and my bag had some, dates that were worth far more as a coin than for its silver content. This was a win win situation. It was like getting a bag of quarters out of a vending machine back in 1967. One caveat - count your purchase manually. They sell them by weight but count them with an auto counter that has come up short 3 times out of 5.

Oct 09 08:11 AM

[tripleblack:]

My personal wild conspiracy theory is that the idea is to use the silver short to restrain gold, which has a close link to silver (both in the mining outcome and the function it serves in places like the jewelry industry).

The failure of the main participants to unwind their short positions in the face of large losses and continuing costs would lead one to start exploring things like this.

Of course, it could also just be some bored bankers reduced to messing around with these games using TARP play money not allocated to the dollar carry trade.

LOL, as for disclosure, I am long silver.

Oct 09 08:14 AM

[USisCorrupt:]

You post you are Long the GLD & SLV ? If you were truly on top of your game you would be Long the PHYSICAL BULLION. You need to wake up and realize you are just enabling the shorts through the PONZI scheme by being in the Paper Gold & Silver and not the REAL THING!

Oct 09 08:26 AM

[Patrancus:]

Do not kid yourselves the government banksters are in charge, our monkey's uncle sam is riding short upon the back of metals like ticks on a dogs back, in order to keep metals prices from blowing sky high. sams unrestrained continued financial backing of his banking stooges, jpm and others is doing everything it can to keep the lid on. when the dollar is malignant, what are you and everyone else going to rely on? their ain't no leash on government spending, democrats are spending money they do not have and never will get. Borrowing 500 billion dollars per day is insanity, these kind of government solutions have been tried in the past, and every time they are tried, they end up making things much worse for everyone, sometimes they even ended up in world war. Why don't folks remember their history and wise up? Because it is not about fixing the economic problems it is about gaining the largest socialist empire ever imagined upon the earth. It is just criminal beyond comprehension.
Tax Cuts Feed People / Tax Increases Feed the Beast

Oct 09 09:10 AM

[GMiki1:]

Apparently some Asian central banks were buying dollars yesterday so the dollar wouldn't collapse too quickly. What a crazy, dangerous game. I'm long silver and gold, both physical and SGOL and SILV, SLW, and some miners. The stock market may or may not crash soon... Go figure--I can't any longer. What a mess. At some point the precious metals will explode (again) and what will the shorts do? Even if they settle in cash...

Oct 09 10:10 AM

[MBAaggie:]

I consider physical silver as my nuclear option. I have been buying physical and paper silver since $10/oz. And, will continue to buy on dips. China cannot hoard all of the precious metals.

Oct 09 12:44 PM

[Contrary Le...:]

I got burned bad twice in a row playing the silver futures. So now I am just into gold bullion and Silver Standard Resources stock... oh and Saskatchewan farm land.

I don't think that you are 'enabling' the shorts by being long on silver futures. Sooner or later they will have to capitulate.

Oct 09 05:47 PM

[tripleblack:]

LOL, when I say "long" I am not just talking about futures.

I am long silver bullion and coins, and stock as well. I've owned silver for over 20 years, and have gradually added to my hoard as time went on.


On Oct 09 08:26 AM USisCorrupt wrote:

> You post you are Long the GLD & SLV ? If you were truly on top
> of your game you would be Long the PHYSICAL BULLION. You need to
> wake up and realize you are just enabling the shorts through the
> PONZI scheme by being in the Paper Gold & Silver and not the
> REAL THING!

Oct 09 08:54 PM

[swsprime:]

Ed,

You are seeing just the tip of the Ponzi iceberg when you look at Gold and Silver shorting. Check out this interview yesterday with Adrian Douglas:

www.kingworldnews.com/...

Adrian has been monitoring precious metals marginal banking for 20 years and knows what he is talking about.

P.S. Get out of GLD and SLV and into physical gold and silver or mining stocks.

Oct 10 12:42 AM

[Plebian:]

A bit off-topic, but what went wrong with NASA's LCROSS mission that bombed a moon crater today?... How could sending a 2-ton projectile down at 5,000 mph create absolutely no visual physical signs of a dust plume? Isn't the moon's surface supposed to be 'dusty', with a gravity force lower than the Earth's? So where is all the dust and debris?...

The public is right to doubt the impact events for having created no dust plume at all, nothing visual or physical of the sign of a major high-energy impact, which indeed this was. Will we learn the truth about what happened?... Wouldn't any reasonable person be skeptical?

Oct 10 12:45 AM

[Ekklesia:]

The Shorts will be shorted this time. I hope they lose there shirts as well as there Swiss Chalet's
High Ho Silver and away!!!

Oct 10 09:34 AM

[Ekklesia:]

LONG SLW,SVM,SLV GDX

Oct 10 09:36 AM

[5142152-337:]

The CTFC has TRADITIONALLY not been our friend, however, with Gensler at the helm, that may be changing. In any event, the shorts, EGBs (elitist greedy bastards) are getting their head handed to them and soon they will lose it completely. Ah, then the fun begins as silver and gold go on a runup that defies imagination!

Buy PHYSICAL silver and gold!

Oct 10 08:13 PM