Commodity Trade Mantra

Posts Tagged ‘Short Positions’

To Desperately Exit Short Positions, Banks Chose a Chinese Holiday to Slam Gold Prices

On October 4, 2016, for no apparent economic reason, the paper gold market was suddenly flooded with fictitious yellow metal. The reason gold prices dropped so dramatically, therefore, is probably as fleeting and capricious as the people behind it. Here are two Major possibilities. However, this is a major opportunity for purchasing real gold at a discounted price.

Silver Prices in Uptrend or is More Correction Yet to Come?

The Daily trend has flipped higher but the intermediate term trend for silver is yet lower. Hedge funds remain bullish on silver. As long as this recent upside momentum remains intact, this should pose no problem, but as we have seen time & again, any hesitation to move higher, any loss of upside momentum, and this fickle crowd will have to be watched for further long liquidation.

Signs That The Silver Bull Market Is Consolidating

The bear market phase in silver from 2011 has definitely ended. However, it has risen quite sharply in recent months to arrive at a zone of significant resistance, so it is quite normal for it to consolidate or react back here, before later breaking above this resistance and continuing higher. A reasonable objective for a correction is the support level seen at $18.

The Silver Futures Market War Continues Unabated - Be Cautious

The hedge fund net long is at a new all time high. The Swap Dealer net short is also at a new all time high. Commercial net shorts in silver are fast approaching the all time high set back in October 2009. All of this being said, the composition of this silver market internally is becoming extremely unnerving. If you are long in silver – be cautious and whatever you do, do not grow careless.

Silver at Crucial Level, Commercials Underwater for Almost a $1 Billion - NOW?

As we have now punctured an important silver trend line, what happens next could be very interesting. If silver closes above $20.35, the 50 (MA) trend line at a significant margin, we could see a lot more hedge funds and large traders jump into the silver market bandwagon. Bullion banks who hold record commercial silver short contracts, will likely defend the $20.35 price at all costs.

A Technical Correction in Dollar can put some Pressure on Gold Prices

Given the relatively small amount of deliverable gold in the market at any one time, the gold price has the potential to be extremely volatile with this level of off-market speculation hanging over it. The wider public is slowly waking up to the horrors of negative interest rates & withdrawal of high-denomination bank notes, both which will almost certainly increase demand for physical gold.

Has the Oil Price Rally Gone Too Far? Time for a Correction or Yet More to Rise?

As usual, the oil markets are rife with confusion and uncertainty. Speculators could be overextending themselves – Or – realize that the rally has run out of steam & then decide to pocket their profits. The longer-term looks a little clearer on the back of rising demand and shrinking supply. The market will have to balance out; the only debate is over how quickly that happens.

Young Bull Run In Silver Prices Is Just The Tip Of The Iceberg

When silver awakens to a new bull market after a long bearish slumber, massive gains are usually unleashed. The tiny advance in silver prices (of over +20%: official new-bull-market metric) so far (faring better than gold) is just the tip of the iceberg. Speculators and investors alike are returning as awareness spreads of how radically undervalued silver is compared to prevailing gold prices.

Star Performance in Silver yet bears Characteristics of a Bear Squeeze

The strength in silver in recent days indicates of an overall shortage & is an illustration of how the mixture of regulated futures, forwards & over-the-counter instruments creates analytical difficulties. CFTC’s CoT Reports indicate silver is very overbought, with hedge funds holding near-record net longs. Silver’s outperformance has the clear characteristics of a bear squeeze.

What's Really Driving the Rally in Crude Oil Prices?

Does the huge rally in crude oil mean it’s time for us to bet on higher prices? Or is this rally doomed to fizzle? As crude oil has soared over 50% since Feb. 11, the number of bets on increased prices has barely budged. It’s been a hell of a bottom-bouncer so far. But we need to see more evidence before we’re ready to declare this new crude oil rally alive & well.

JPMorgan Corners LME Aluminum Market, Leading To Strange "Price Anomalies"

For some months now there have been large holdings of aluminum warrants, which are a claim to metal stored in warehouses approved by the LME. Currently there is a dominant position holding 50-79% of warrants. “JPMorgan have been doing this on-and-off for a long time. The backwardation (or premium) doesn’t accurately reflect oversupply,” a Reuters source at a commodity trading firm said.

Why do Banks Continue Silver Shorting so Aggressively?

A CoT survey taken on Tue, Dec 29, 2015, when silver was at $13.93, showed Commercial NET short position was just under 30,000 contracts as they were long 52,149 contracts & short 82,027. Data on Tue, Feb 16, 2016 when silver was at $15.33 (up 10%), showed long 44,638 contracts & short 114,700 for a NET short position of 70,062 contracts – largest since 2008. Why now?

The Outlook for Gold Prices is Brightening Rapidly

US dollar’s serious breakdown, which results from the NIRP move in Japan & the realization that this makes further rate rises in US much less likely, coupled with growing pressure for global QE to beat back the mounting forces of deflation mean that massive and widespread inflation is not far. While this is obviously not good news for the average housewife, what could be better for gold?

Is The Gold And Silver Bottom In? Nothing Confirmed Yet

The purpose of articulating the importance of confirmation is now focused on gold and silver because of the increased calls for a [possible] bottom in both. The information gleaned from chart market activity, in the form of price/volume behaviour, is telling us that no bottom has been confirmed in gold and silver, factually speaking. Many may believe otherwise.

Is Silver Intentionally Being Drained And Diverted From The Retail System?

If silver that could be used to stamp silver eagles to meet demand is being exported to India – in the context of the registered silver stock at the Comex dropping like a dead fly, it suggests perhaps that the authorities are intentionally draining the retail silver distribution system in the U.S in order to meet demand obligations offshore.

Why So Much Volatility In Oil Prices? Blame The Speculators

Much of the gain was related to speculative movements & decisions of oil traders moving barrels of oil on paper. Speculators had taken a near-record level of short positions on oil, predicting oil prices would continue to fall. They did fall, for about 2 months. However, with such a large preponderance of short positions, the timing was right for a correction.

Price Manipulation In The Oil Markets?

Whether price manipulation is occurring now in energy prices is debatable but be aware, as where there is smoke, there is fire. The question: When is enough, enough? When does it ultimately damage the faith in “free” trading in all assets among investors? Volumes have been declining reflecting a loss in investor confidence.

Something BIG Is About To Happen To Silver

U.S. silver bullion imports surged 44% in the first months of 2015 compared to the same period last year. Who is acquiring this silver… and why? Also as per the recent COT Report, the Commercials (big bullion banks) added a massive 18,595 new silver short contracts in just the last week. What does this all mean?

Silver Buying Only Starting - Investment Demand Awakens

Silver is on the verge of a major breakout following this week’s sharp rally. Silver investment demand varies dramatically with the shifting whims of traders’ sentiment it. And since any market’s prices are effectively set by marginal new buying & selling, nothing is more important for silver prices than investment demand.

Gold's Day will come - Perhaps as soon as 2016

For 2015, I expect gold will trade in the $1,200–1,300/oz range. There’s a very good chance 2016 could be a much better year for gold, especially if the Fed lowers interest rates again & embarks on QE4. The potential end game for gold is if a complete loss of confidence in the US dollar forces the government to peg it to gold.

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