Monthly Bank Participation Report Of Precious Metals: April 2014

The CFTC releases at the end of each month the futures positions in precious metals of the large banks. At the closing of April 2014 there was no big difference in gold and silver compared to the previous month. Palladium had a notable increase in short positions by US banks. A detailed analysis was provided by Ed Steer in his latest newsletter (click here to subscribe).

From Ed Steer’s daily newsletter:

As far as the companion May Bank Participation Report [BPR] is concerned, don’t forget that this is the one day a month when we find out what the U.S. and world banks are up to in the Comex precious metals, as the data for this report is extracted directly from the Commitment of Traders Report, so we can compare apples to apples between each report.

In gold, 4 U.S. banks are net long the Comex futures market by 12,159 contracts, a decline of 2,400 contracts since the April BPR.  Since Ted Butler says that JPMorgan has a long position of about 43,000 contracts, that means that the other 3 U.S. banks must be short about 31,000 contracts [give or take] between them to make the math work.

Also in gold, 21 non-U.S. banks are net short the Comex futures market by 42,962 contacts, an increase in their collective Comex short position of 3,985 contracts from the April BPR.  I’m still of the opinion that a decent chunk of this short position is held by Canada’s Scotiabank after their wholly-owned subsidiary Scotia Mocatta was forced to report its Comex futures market positions by the CFTC back in October of 2012.  So it’s my guess that once you divide the remaining short contracts up amongst the other 20 non-U.S. banks, their positions are immaterial compared to the outrageous positions held by the four U.S. banks—and Scotiabank.

Here’s Nick Laird’s chart showing the latest monthly data—and the ‘click to enlarge’ feature works wonders.  Note on Chart #4 the blow out of the non-U.S. banks short position back in October 2012 when Scotia Mocatta was forced to come out of the closet—on both the long and short side. Chart courtesy: Goldchartsrus.

GOLD_CFTC_bank_participation_April_2014

CFTC bank participation report in Gold

 

In silver, ‘3 or less’ U.S. banks were net short 16,485 Comex contracts, a decline of 4,115 contracts from the April BPR.  Since Ted puts JPMorgan’s short-side corner in the Comex silver market at around 20,000 contracts, this means that ‘2 or less’ U.S. banks have to be net long the Comex silver market to the tune of 3,500 contracts or so, in order to make the math work.  The other two U.S. banks holding long positions would be HSBC USA—and possibly Citigroup.

And just as a matter of interest, look at the short-side corner blow-out in Comex silver back in August 2008 when JPMorgan took over the silver short position of Bear Stearns.  A short position, most of which, they still hold to this day.  The data is on Chart #4—but stands out on Chart #5 as well.

Also in silver, no less than 13 non-U.S. banks are net short 13,108 Comex silver contracts between them—that’s a decline/improvement of 1,613 contracts from the April BPR.  My comments on Canada’s Scotiabank/Scotia Mocatta in silver are similar to what I had to say about their short-side corner in gold further up.  When they were outed by the CFTC in October of 2012, their Comex short position blew out the non-U.S. bank category by many hundreds of percent, as you can tell from Chart #4 below.  I’m still of the opinion that two thirds to three quarters of the 13,108 contracts held net short by the 13 non-U.S. banks is held by Scotiabank.  This makes the short positions of the 12 remaining non-U.S. banks immaterial.

SILVER_CFTC_bank_participation_April_2014

CFTC bank participation report in Silver

 

In platinum, 4 U.S. banks are net short 11,782 Comex contracts, a decline/improvement of 1,046 contracts from the April BPR.  These four banks are short about 18% of the entire Comex platinum market on a net basis.

Also in platinum, 13 non-U.S. banks are net short 5,559 Comex contracts, an increase of 631 contracts from the April BPR.  Between them, these 13 non-U.S. banks are net short 8.6% of the entire Comex platinum market, which means that their individual positions are immaterial compared to the outrageous short positions held by the 4 U.S. banks.  And I would be prepared to bet big money that JPMorgan holds the lion’s share of the short positions held by the U.S. banks.

PLATINUM_CFTC_bank_participation_April_2014

CFTC bank participation report in Platinum

In palladium, ‘3 or less’ U.S. banks are net short 9,006 Comex contracts between them.  That’s a decline/improvement of 647 contracts from the prior month.  These ‘3 or less’ U.S. banks are net short a bit over 20% of the entire Comex palladium market.  It’s also a safe bet that JPMorgan hold’s the lion’s share of these short positions as well.

Also in palladium, not less than 11 non-U.S. banks are net short 4,373 Comex contracts, an increase of 733 contracts from April.  These 11 non-U.S. banks are net short 9.8% of the Comex palladium market, or less than 1% apiece, also immaterial.

PALLADIUM_CFTC_bank_participation_April_2014

CFTC bank participation report in Palladium

 

As I say every month at this juncture, this is a 100% “Made in America” precious metal price management scheme, with a little international flavour from Scotiabank in silver thrown in.  And the incredible thing about all this is that all these numbers come directly from the CFTC.  I don’t have to make them up.  This, along with the four charts in Friday’s column, is prima facie evidence that hangs them all.  Case closed.

Source: Ed Steer (text) and Nick Laird (charts)

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