SHORT NO MORE
Evidence indicates that the circumstance of the concentrated short position in COMEX silver futures is about to change radically. JPMorgan is about to double cross its fellow concentrated short sellers due to its massive physical holdings of silver and gold. Either regulatory pressure, bad publicity, or fear of indictment may also be responsible. Or maybe they just have enough silver and gold.
The “blockbuster” feature of the recent COT reports is the large amount of short-covering in both gold and silver by JPMorgan. This dovetails with my double-cross premise, in which JPMorgan abandons its suppression of the silver and gold price with the 7 other big concentrated shorts. In last week’s report (Nov. 15) JPMorgan appeared to be a massive buyer. For someone hoping for signs that JPMorgan might be intensifying its efforts to double cross the other large commercial shorts, this was manna from heaven.
If my estimate is correct, JPMorgan holds about 2.5 million ounces of a COMEX paper gold short position against a 25 million-ounce physical gold long position, perhaps the greenest light JPM has ever had to let gold prices rip to the upside. I peg JPMorgan’s silver paper short position to be between 25 and 50 million ounces. You have to go back to June to find similarly low short positions for JPMorgan. Since that time, JPM has increased its physical silver long position to 900 million ounces, making its true net long position (physical minus COMEX paper shorts) as 850 to 875 million ounces. In effect, JPMorgan has never been more net long silver (and gold) than it is currently.
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