Wednesday, August 17, 2011

4 Major US Banks Increase Silver Short Position by 3.5 Million Ounces in July

In May, we documented how 4 large US banks (likely chiefly JPM and HSBC) increased their silver short position by 10 million ounces while the silver price declined by 36%.  We wrote that this was perhaps the best evidence of silver manipulation to date, as any rational trader would have COVERED their short position during such an extreme sell-off, rather than massively increasing their short position INTO price weakness!
As can be verified by the CFTC data below, we also documented how these same 4 US banks increased their silver short positions by another 2.28 million ounces in June.
The CFTC Bank Participation Report data is out for July and these same 4 banks have again massively increased their silver short position.

On 7/5/11, 4 large US banks held 23,084 silver short contracts, the equivalent of being short 115,420,000 ounces of silver.
As of 8/2/11, their short silver position has increased by another 3.5 million ounces to 23,775 contracts, or 118,875,000 ounces!
This means that 4 large US banks now hold short contracts over 4 times the size of ALL available COMEX registered (deliverable) silver stores at 27.9 million!

In fact, the cartel's naked short silver position is almost back to the 25,000 contracts they held in April prior to their short-squeeze panic buying which drove silver from $40 to $50 in weeks!
Respected silver analyst Ted Butler had been advising earlier this summer that he believed that JPMorgan was attempting to exit their silver shorts, but the CFTC Bank Participation Report data indicates that ever since the April short-squeeze in silver, the cartel has continued to steadily increase the size of their silver short position regardless of price action in the underlying metal.
Look for the cartel short position to continue to increase until a rising silver price again induces a major short squeeze, which could appear again in the $45-$60 price range.

                     BANK                   LONG              SHORT          OPEN INTEREST

08/02/11 CMX SILVER U.S.            1,040  0.9     23,775 19.7     120,385
                NON U.S.            2,796  2.3      3,573  3.0
07/05/11 CMX SILVER U.S.                    2,413  2.2        23,084 20.7         111,251
                    NON U.S.                2,565  2.3        3,216  2.9

06/07/11 CMX SILVER  U.S.                   2,302  1.9        22,628 18.7         121,191
                     NON U.S.               2,946  2.4        2,880  2.4

05/03/11 CMX SILVER  U.S.          4        1,783  1.4        20,613 15.6        131,907
                     NON U.S.     12        2,873  2.2        6,481  4.9
04/05/11 CMX SILVER  U.S.                     825  0.6        25,412 17.8        143,013
                     NON U.S.               2,882  2.0         7,647  5.3