In Ted Butler's Archive


The search is on for the Silver Whale – the very large COMEX futures long who added close to 20,000 contracts (100 million ounces) from late May to late June. Since June 25, nearly the entire added long position has been liquidated as of last week’s Commitments of Traders (COT) report. That was the largest concentrated long position by 4 traders in COMEX history. The big increase in the concentrated long position began before the key moving averages were penetrated to the upside and was completed at a remarkably low average price – around $15.

There was the sudden concentrated buying of approximately 100 million ounces of COMEX silver futures contracts and a simultaneous physical deposit of 100 million ounces into a few silver ETFs. This was a well-designed and well-executed strategy to do something that makes all the sense in the world – buying a big chunk of physical silver at as cheap a price as possible. The idea was to buy as much physical silver  as possible without causing the price to rise sharply. I would call this recent buying of 100 million ounces of silver via futures and its subsequent conversion into physical silver in the silver ETFs a masterstroke.  It’s hard not to interpret this as being extremely bullish for the price of silver, particularly considering just how cheap the metal is by any objective standard.

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