They can, and they are, sometimes. This then results in
price explosion. More often then not they are right. I believe in case of gold they don't have the bullion, so they can be squeezed. COT shorts are bullion banks. They are naked shorts. They are short bullion OTC (they loaned some from central banks, sold it, then bought forwards with the miners. These forwards are now liquidated by miners, who are, by the way, the only commercials who "have" the gold. So - the commercials who have the gold are buying their forwards, 700 tonnes per year- more than OI on Comex. Loans, on the other hand, have to be repaid, so bullion banks remain naked short the physical metal, to the tune of 5,000 tonnes + paper shorts on Comex) Can they PRESS their shorts to get long specs out of their positions? They sure can!
Then POG will drop a lot. If some of these comex specs are actually gold investors, they will demand delivery, and gold will shoot up dramatically. There is not enough gold to be delivered. The volume on the physical market is only 2% of derivatives market. So, by buying a little physical you can influence your position in derivatives. That used to be the tactics of the bullion banks to suppress POG and POS. It looks like some large specs may have figured it out and are using it to their benefit? |
