Silver and Gold Short and Long Positions on Comex

Silver and Gold Short Positions Decrease as Silver and Gold Long Positions Increase

Will China Revalue Gold?

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A Chinese Revaluation of Gold and Silver is More Likely than a Comex Default

Earlier this month we reported on the silver and gold long and short positions on Comex as of October 28, 2014.

We noted that gold and silver trade on Comex in amounts that massively exceed what is physically available for delivery in short order and at the prices traded.

This does not deter the largest traders on Comex (long and short) all of whom are bullion banks specializing in this type of trading.

Think of Comex as like professional wrestling where the participants know its fake but play along anyway because there is money to be made, manipulation to be accomplished; not gold and silver to be bought and sold and delivery taken.

Comex is a place where banks trade gold and silver they don’t have to banks who buy gold and silver they don’t want.

Comex is a paper market.

Since we last updated the Comex long and short positions, the largest eight traders decreased their gold and silver short positions and increased their long positions. Silver expert Ted Butler suspects that JPMorgan’s short position has decreased and that the top silver short position is held by Canada’s Scotiabank.

Days of World Production Required To Cover Short Contracts – November 11, 2014

Since October 28, 2014, the silver short positions of the eight largest traders decreased from about 135 days of global mining production to about 120 days; gold short positions from about 60 days to 55 days.

Click here to see the days of world production required to cover short contracts as of October 28, 2014.

Days of World Production Required To Cover Long Contract Deliveries – November 11,2014

Since October 28, 2014 the silver long positions of the eight largest traders increased from about 95 days of global mining production to about 100 days; gold long positions from about 47 days to 53 days.

Click here to see the days of world production required to cover long contract delivery as of October 28, 2014.

The Shanghai Gold Exchange

Unlike Comex, the Shanghai Gold Exchange (SGE) is a market that specializes in physical bullion trading.

Here is a chart showing the amount of physical gold actually delivered pursuant to trading on the Shanghai Gold Exchange.

In the most recent reported week ended November 7, 2014, the SGE reported delivering 54.19 tons of gold.

Deliveries of gold bullion on the Shanghai Gold Exchange continue to increase.

Currently, Comex trading impacts the prices of gold and silver more than the actual supply and demand dynamics of gold or silver or any trading on the Shanghai Gold Exchange.

Comex Default or Chinese Gold Revaluation?

The prices of gold and silver will finally adjust, most likely not because of a long predicted Harvey Organ style Comex failure of delivery default, but when China decides that it has enough gold to declare a new higher price.

The country with the most gold has an interest in valuing its gold at the highest possible price.

The United States revalued gold 69% higher in 1934 from $20.67 an ounce to $35 after it confiscated its citizens gold leaving it with the largest gold holdings in the world.

Will China soon do the same?