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Abandoning Precious Shorts?

|Includes:SPDR Gold Trust ETF (GLD), SLV

President Obama has now signed the FinREgs bill into law. The CFTC now has a mandate to impose position limits of shorts within 180 days. What those limits will be remain to be seen. 

In Friday's Commitment of Trader's Report, JP Morgan reduced their net silver short position by 3,254 contracts. The eight bullion banks led by JP Morgan, hold 76.6% of the entire gross commercial silver short position.

The total commercial net short position in gold, fell for a second week in a row - down 32,684 contracts, to 21.6 million ounces. Which is a bit over 100% of the gold commercial net short position by the '4 or less' bullion banks.

Could it be that the decade long holders, of the majority of commercial net shorts in gold and silver, are abandoning their precious shorts in advance of a ruling by the CFTC mandate? If this be the case, then the prices of both gold and silver will rise dramatically, when freed from the constraints of these grotesquely large concentrated short positions. All eyes are now on the CFTC and what transpires within the next 180 days.

Disclosure: Long physical gold and silver.

Disclosure: Long physical gold and silver.

Stocks: GLD, SLV