Brad Zigler

Incurious Gold Manipulation Theorists

Mr. Zigler fails to mention the supposition of banks holding "naked short positions" because that "fact" hasn't been established by any evidence produced by those advocating the existence of a manipulative bankers' cabal.

Investment banks (and now, with regulatory changeovers, commercial banks) in the US are the primary dealers of precious metals swaps and other OTC derivatives.

People look at the futures positions held by these banks and thinki that these represent the totality of the institutions' exposure.

But it ain't so.

The CFTC reports only the futures positions held by the banks. What you DON'T see in the reports are the cash and OTC derivatives positions that these futures offset. Those would be LONG exposures undertaken against customers.

Banks, as commercial entities, use futures to hedge residual exposures in other markets.

Money managers, on the other hand, hold only speculative positions. You see their entire exposure to precious metals in the CFTC reports.

On Nov 04 12:24 AM sweetspot wrote:

> "Money managers have adopted a historically lopsided stance in gold
> futures. Long positions held by these funds are 111 times the size
> of their short positions. Put another way, 99% of the futures positions
> held by funds are purchases."
>
> Of course there are a lot of long positions on gold now ... we're
> in a bull market for gold! And these long positions are held by many
> different money managers. What Mr. Zigler fails to mention is that
> a couple of US banks have held 25-30% naked short positions on the
> entire world's supply of silver and gold year after year! This is
> not only manipulative ... it is criminal.