Monthly Bank Participation Report Of Precious Metals: August 2014

The CFTC releases at the end of each month the futures positions in precious metals of the large banks. At the closing of July 2014 there was no big difference in gold and silver compared to the previous month. A detailed analysis was provided by Ed Steer in his latest newsletter (click here to subscribe). We want to share his analysis because Ed Steer comes to the following factual conclusion:  “3 or less” U.S. banks, along with Scotiabank in silver and gold, run the price management scheme.

From Ed Steer’s daily gold and silver newsletter:

Along with the Commitment of Traders Report came the companion August Bank Participation Report.  This report strips out the Comex long and short positions for all the banks on Planet Earth that hold positions in the Comex futures market—and for this one day a month we get to see these guys naked as jaybirds.

In gold, “3 or less” U.S. banks increased their net short position from 12,334 contracts in the July BPR, to 17,032 contracts in the August BPR.  Since Ted says that JPMorgan is long 20,000 Comex contracts, then this means that the other two U.S. banks must, by simple arithmetic, be short about 37,000 contracts between them.  These other two U.S. banks would be HSBC USA and Citigroup.

Also in gold, 21 non-U.S. banks are net short 63,049 Comex contracts, which is an increase in short position of 1,000 contracts since the July BPR.  I would guess that around 50% of the 63,000 contracts is held by Canada’s Scotiabank—and the remaining 30,000 contracts split up more or less equally between the other 20 non-U.S. banks would border on the immaterial.

Here’s Nick Laird’s BPR chart for gold.  In this five-chart sequence, it’s charts #4 and #5 that are the critical ones.  Note the blowout in the Comex short position in gold for the U.S. banks back in August of 2008—and the blowout in the non-U.S. banks in October of 2012.  The August 2008 blowout occurred when JPMorgan took over the gold short positions of Bear Stearns—and the October 2012 non-U.S. bank short position blowout was when Canada’s Scotiabank was forced to declare the Comex positions held by its wholly owned Scotia Mocatta subsidiary, which you can read about about it on the Bank Participation Report home page linked here.

In silver, “3 or less” U.S. bank are net short 18,447 Comex contracts, which is an increase of about 1,000 contracts from the July BPR.  From the Commitment of Traders Report, Ted says that JPMorgan’s short-side corner in the Comex silver market is 18,000 contracts, so it’s pretty much a given that virtually the entire position shown above belongs to them—with maybe HSBC USA and Citigroup holding small net long positions.   As you can see, the silver price management scheme, from a U.S. bank perspective, is 100% run by JPMorgan.

Also in silver, “10 or more” non-U.S. banks are net short 24,135 Comex contracts, which is about a 25% increase/blow-out from the July BPR.  I’m of the opinion that Canada’s Scotiabank probably hold 75% or more of this Comex short position.  If that’s the case—and I’m totally convinced that it is [see the next paragraph], then the remainder of that short position, divided up more or less equally between the remaining “9 or more” non-U.S. banks is, like gold, pretty much immaterial.

Here’s Nick’s BPR chart for silver.  And, like gold, please cast your eyes on August 2008 and October 2012 once again—and for the same reasons.  In August 2008, JPMorgan took over the gargantuan short position held by Bear Stearns—and in October 2012, Canada’s Scotiabank was forced to disclose its Comex positions in silver as well.  It’s this data point that gives me the confidence to finger Scotiabank as the second-largest silver short on Planet Earth.



Well, dear reader, this isn’t rocket science, as it’s all government data from the CFTC that proves beyond a shadow of a doubt, that “3 or less” U.S. banks—along with Scotiabank in silver and gold—run the price management scheme, and all under direction of the capo di tutti capi—JPMorgan Chase.

Courtesy: Ed Steer’s gold and silver newsletter and Nick Laird’s Goldchartsrus.

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