Where are the bulls?

Goldmoney ^ | 3 Oct 25 | Alasdair Macleod

[delta7]

Comex is effectively the largest gold and silver mine, with stand for deliveries a source for bullion. The conversion of paper gold and silver into bullion is now conspicuous. It cannot last.

As our headline chart illustrates, gold and particularly silver have had a good week with prices continuing to rise. In European trade this morning, gold was $3860, up $101 from last Friday’s close. And silver at $47.33 was up $1.30 on the week. So far this year, gold is up 47% and silver by 63%.

The question on everyone’s lips is will it continue?

The answer appears to be in the affirmative. Look at the relation between Comex open interest and the price in the silver contract:

The 63% rise in silver has been driven by a massive bear squeeze on Comex and not speculator interest, which has broadly moved sideways for the last eighteen months. In theory, bullion banks run short positions on Comex to hedge their longs on the LBMA. But backwardations and high lease rates in London tell us that this is not so: the bear squeeze is on London as well. And while the shorts appear to be holding their ground by containing open interest, the damage to them is from soaring prices.

This contract has turned into something no one expected, and that’s a delivery mechanism for buyers demanding physical bullion. This week, stand for deliveries for silver in the first four days were for 393 tonnes, making the total for the year 11,244. This is 60% of estimated total mine production this year so far. In effect, Comex is the largest silver mine in the world, and the strains are beginning to show.

Similarly, with gold. The first four days of this week saw stand for deliveries totalling 86.6 tonnes, taking the annual total to 990 tonnes. This is three times China’s annual output, making Comex the largest gold producer as well. The relationship between open interest on Comex and the price is next:

Here again, while open interest is volatile, its declining trend while the price rises is clear evidence of a systemic squeeze on the establishment bullion bank traders, not being driven by speculative demand. Indeed, within subdued open interest, there are shorts in the speculator category totalling 92,088 contracts on the last Commitment of Traders report (23 September). They will be praying that they are not going to be asked to deliver gold which they obviously have not got. And they should buy back these positions if they do nothing else.

The value of gross and net shorts in the swaps category is at all-time highs and must be hurting badly on every $100 jump in the gold price:

The gross short position is costing 28 participants a total of $108.5bn. That is over three times pre-covid levels.

Covid lockdowns certainly destabilised the global economy, leading to an explosion of debt in welfare-driven nations. It is this explosion which is flooding the world with credit, distorting asset values and undermining currencies’ purchasing powers. This debt-cum-credit bubble is breaking apart the fiat currency system, as China, Russia, and their cohorts in the Shanghai Cooperation organisation, BRICS, and the wider lobal south all run for cover.

So far, western investors appear to be blissfully unaware of what is happening, but some are just beginning to realise they should be buying gold, or if they feel the need to catch up perhaps some silver. Demand for ETFs are the best indicator of this awakening demand. But as the World Gold Council’s chart shows, the amounts going into ETFs are still derisory in the context of global portfolios estimated at over $300 trillion.

Portfolio adjustments in favour of gold, silver, and commodities generally are yet to come. And when it does, Comex and London are bound to face far greater challenges than an old fashioned bear squeeze.

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TOPICS:
KEYWORDS: chinesesge; gold; shanghaigoldexchange; thechinesesge

[delta7]

The day the U.S. corrupted Comex fails to make delivery will be historic, but how long they have been able to manipulate the US PM markets should be the question.

They have lost their grip, with the Chinese SGE , which deals only in physical, not paper, is now controlling the PM prices.

Hint: the SGE was trading Silver at $4 plus per ounce higher than the US Comex last week….which has already put physical Silver at all times high , it broke $50 on the Chinese SGE. it’s rocket time and will hopefully wipe out the corrupted US bullion banks that have been shorting for decades….

…expect some “ news” about the US banking industry shortly.

[BipolarBob]

I don’t know where the bulls are but I have seen their droppings. I

[TexasGator]

"the Chinese SGE , which deals only in physical, not paper,"

FALSE

[ConservativeMind]

It not the highest, when adjusted for inflation.

https://www.macrotrends.net/1470/historical-silver-prices-100-year-chart

Look at the 2nd graph down.

[kiryandil]

I notice that your troll stalker never deals in useful information:

https://discoveryalert.com.au/news/shanghai-gold-exchange-global-trading-2025/

[reasonisfaith]

Gold is real.

The Federal Reserve note is fake.

[delta7]

I notice that your troll stalker never deals in useful information:
——————
Oh the old TxGator, he thinks disrupting is getting somewhere. The only thing it has gotten him in the past is suspension from FR. He was absent the past two weeks, no doubt cautioned again.

He is finally coming around and acknowledging Armstrong’s Socrates forecasts are panning out.

[Presbyterian Reporter]

Many things have contributed to the increase in gold and silver this year. Such as:

1. Instability in the world, predominantly in Russia/Ukraine and Mideast.

2. Concerns about worldwide immigrations and US taking a hard line by putting a stop to it.

3. Decline in value of dollar index since Jan 2025 of about 15%.

4. Governments worldwide spending more than they take in revenue.

5. Governments and people buying and keeping gold and silver as a source of value.

6. In short term the markets can have squeezes and those who have shorted gold and silver this year were generally the losers.

7. Gold is at an all-time high so shorting the market is tempting.

8. Silver is $2.00 from its previous highs of $50 achieved twice. So the holders of silver will be tempted to sell and $50 is a relatively place to short silver.

Enjoy the ride. It has been a great year for the gold and silver bulls.

[logi_cal869]

The so-called ‘market’ cannot continue a meteoric rise on artificial wealth creation.

I heard a local ‘expert’ on the radio who in the same breath transitioned from discussion where he bemoaned the loss of medical subsidies - as to its effect upon the markets - into discussion about real money, i.e., the fruits of investments.

It was rather surreal, and I had rather biting words in my email to the station.