This page has been archived and commenting is disabled.
THE WTF COMEX TRAVESTY
THE WTF COMEX TRAVESTY
By RUSS WINTER of Winter Actionables

Despite the knot in my stomach, I’m proceeding directly to the available Comex forensics. The gold and silver Commitment of Traders report is highly revealing. The data is for Tuesday, Nov. 26, when gold was trading at 1,243.
The settlement price on Monday was 1,222. The managed money boyz, (aka Slingers) have now ramped up their biggest short position since early July’s low at 77,658 contracts (7.766 million ounces). With this week’s net managed money long position down to 15,961 contracts from 34,531, we can see from the report that about a third of this was reduced longs, perhaps from stop hunting. But again, two-thirds of this week’s operation was raw naked short selling.
On the other side of this bizarre trade: Since Oct. 29, the large commercial combined net short position has fallen an extremely large 78,551 contracts (7.856 million ounces) to a near-record low of 28,236 contracts net short. After Monday’s assault, I would imagine the previous July 9 record was broken and these positions are even more extreme.

Chart source: GOTGold
Silver slingers reported a new COT record high 27,808 lots short. The previous record was on June 25 with 26,512 shorts at $19.52 silver.

Chart source: GOT Gold
Once piece of information in the report was particularly stunning. The producer/merchant category, which basically is defined as players (such as miners) who actually produce and supply actual physical gold to the Comex, has gone to 5,960 producer contracts long (596,000 oz). This is unprecedented! As you can see, producers have never been long gold since the series began. Even at the bottom in 2009, they were still short.
The supposed purpose of an exchange is to allow producers to price hedge future production. With the Slingers completely distorting the market, this concept has been abandoned. Turning over a whole new leaf, producers now plan to take gold from someone else. Who that might actually be isn’t exactly clear, as naked paper shorts have no real gold to deliver. A subscriber asked where miners sell their gold nowadays. Good question. It sure isn’t the Comex, nor do I think it’s the LME (London Metal Exchange). Instead, these exchanges shuffle pieces of paper around after speculative attacks. There are six cash delivery markets in the world now, and some offer premiums. Nobody talks about it, but why wouldn’t miners just sell there?

Chart source: GOT Gold
But the 5,960 producer contracts long (596,000 oz) might be a key forensic pointing to something else. Nobody is more likely to bring in the armored trucks and clean out what little registered gold remains in the Comex than a player in an industry that is being completely abused by these paper attacks. Incidentally, there were 590,800 ounces of registered gold left at the Comex before Monday’s paper dump. About the same as the producer longs. Naturally, with 6,770 December futures still standing on Tuesday and this historic revelation about the producers being long, one wonders about what’s up.
Following the sequence of this is a little challenging because these reports are issued in different time zones, on different days and sometimes with a lag. Additionally, the banker’s participation report (BRC) is due out on Friday, and I can only imagine how extremely long the U.S. bullion banksters are at this juncture. Bankers were long nearly five million ounces a month ago at $100 higher prices.
Another report, the number of ounces raided out of the GLD and shipped off to China, sometimes doesn’t update or comes with a delay. There were no redemptions Monday. Tuesday’s report showed that only about 58,000 oz was pulled out of the GLD. That is not sufficient to feed this beast. Over 17 million oz has been extracted YTD and they are down to 27,109,000 oz. The question of the day: does GLD still have this in vaulted physical gold or do they now need to run it down too?
The data for the Shanghai deliveries of real gold tend to show up at its site a little after 4 a.m. EST. Last night, a healthy 369,100 ounces of real gold were delivered.
The registered gold report at the Comex is very convoluted, ad hoc and piece meal. I believe that is because issues are deferred, laxly enforced, given promises and convinced to leave their gold. If a producer who is now long starts asking for gold, it will be an entirely different story, a game changer. This can be tracked here and the low inventory levels are evident enough.

As the Comex opens for trading, the remaining open interest (OI) for December will be reported. Going into Tuesday it as now 6,770. This would would take issue notices and whatever was rolled over to February. The actual issuance tally for the day isn’t reported until late in the evening. Since I need to get this posted, and to maintain some continuity I will have to put that OI number up in the comments section in this post. The same will be true of the daily issue reports going forward, so check back to this post.
These issue report show up late at night and are also sometimes delayed. The one last night was posted at 9:22 p.m. and shows 609 contracts out of 658 (65,800 oz) issued from Nova Scotia to JP Morgan. This is for Dec. 4 delivery.

At the margin, and in perhaps what is a dry run on India’s punitive import fees on gold, Sri Lanka has thrown in the towel and has removed its 100% surcharge. Once the jewelry industry there gets back on its feet, that country can soon be another source of heavy duty gold smuggling into India.
- ilene's blog
- 20419 reads
- Printer-friendly version
- Send to friend
- advertisements -


The paper gold question re suppression is like drugs - what is the source of the problem, the drug pushers or the buyers. I'd say the drug pushers only exists because the buyers want the drugs. The same with paper gold, the problem is that many people don't want physical, they want paper, don't care about counterparty risk and like the leverage of futures or forwards. Supplying such demand can't be supression because the buyers aren't interested in unleveraged physical gold. Now there may be some investors buying paper without knowing the risks, but seriously, you can't step into the gold internet without hearing about fractional reserve banking and how bad unallocated is etc etc, so really how many investors would not be aware.
Just like with getting the govt you vote for, well we are getting the gold market investors voted for.
Interesting comments, Bron. I especially like "we are getting the gold market investors voted for".
Although I would still have to ask, if only rhetorically, whether ALL of the paper gold (in all of its different forms) is truly being DEMANDED by investors, and whether or not some or even much of it is, well, fraudulent to some extent or another, and again, possibly being used by 'official' actors to nefariously skew and undermine the price-setting function of the market. But such issues are far beyond my limited knowledge, and I can only speculate here, as well as observe actions, both within the gold market as well as by certain high-level participants in the market (cough, JPMorgan, cough), which do not seem "kosher" to me whatsoever.
I read repeatedly that they have plenty of gold, there's no physical shortage at all LOL... This is going to be SO fucking funny.
Ilene,
Its bend over december. Price gets hammered every christmas on thin markets and vacation absences. Your short specs are just positioning themselves for the annual christmas gold sales extravaganza.
if I wasn't so broke I'd buy
How about a nice can of SPAM for $5? Save money & more to invest in gold!
COMEX?
More like, CRIME-EX!
Beat me to it.
I was about to say "WTF and travesty are normal for the CRIMEX".
hehehe. all gentlefolk there. proof: there is only one raincoat per 67 checks, and they all agree that it's sunny outside
Maybe these producers sold short in longer dated futures a while back and want to buy back at these lower prices -- besides Blythe would have to pay a premium for them to accept cash rather than the metal. So if they sold short at say about 1500 or so and get a 25% premium for cash settlement they bonus all around -- buy back their short and get a nice cash bonus.
We can't dig it up this cheap. Fuck it let's buy some.
Spot on. These COMEX assholes painted themselves into a corner. This will be fun to watch.
This is going to be truly fucking hilarious. Gee, do you think the producers will just roll their sales into the next month? I guess it depends on whether the bullion banks they owe the gold to are cool with getting an iou - from themselves! HA HA HA, I can't fucking stop laughing about this!
Shows how screwed up things can get when you intervene in market action. Yeah the bullion banks want the miners to be forward selling gold now, not buying! I wonder if some are buying for future delivery and I wonder how far forward they are buying. Once they figure it out (which is stretch for many miners) the limit it how much cash they have on hand.
What I was saying is that the guy chosen for the new ABX CEO is an ex-Golmanite. ABX has been a crucial player, historically, in the forward sale price suppression scheme. GHW Bush has been on the board as well as a former Canadian PM (Mulrooney, I think) and other unsavory characters -- power players. I believe it was in the Blanchard price rigging lawsuit that all this came out. One of the bullion banks actually said, in court, that, basically it couldn't be illegal because they were doing it at the behest of the government. It was in a Boston court and the judge cited that argument with some outrage. Anyway this soon to be CEO of Barrick was saying how great hedging was and everyone should do it. And my thought was: hmmmm bullion banks badly want some future gold at these prices--all they can get--maybe to cover leased gold already sold that they may have to deliver.
But the miners buying Comex gold is priceless -- it may turn out to be worthless though when they try to get delivery and have to settle for cash.
An former Squid will succeed Peter Munk as CEO of ABX. He's a big hedging fan. The game is to sell all the leased physical they can get the mitts on, roll the leases until they can get real gold to return. The best source of real gold is future mine production sold forward to bullion banks. ABX has always been a big player. Any miner that does bank financing is forced to hedge. With mine equity values down and margins squeezed the bankster game is to force them into loans and forward sales.
If they're LONG, then its FORWARD PURCHASES!!!! HA HA HA HA HA! They've BOUGHT the gold from the Comex (eg the bullion banks), to deliver to the bullion banks!
Next thing you know, the mints will purchase those IOUs from the bullion banks. The next series of AGEs will be made of paper!
"Trust me. Paper coins can be redeemed for real coins at any time! It's as good as gold, I assure you"
The price of Gold has been pushed down below cost of mining it! So to meet their obligations, the miners can buy the gold for less than the cost to them of mining it! This has to end very badly! The question is; How long can this go on?
A: Longer than you can stay solvent
I can stay solvent my entire life. Actually even beyond, as I can pass on the savings to my children.
This phrase only applies to leveraged cocksuckers.
Oh btw, those cocksuckers tend to run out of their position really quick. Some smackdown, margin calls get triggered and poof! The weak hands are gone.
Who's going to sell real gold when price is $300 and all the paper idiots are already broke?
HINT: It's not gonna be me. My ask is $55,000.
No, actually the answer is not very fucking long at all. And when it breaks, its going to be spectacular.
I knew a guy that actually got physical gold from the COMEX over a decade ago ......it's one hell of a story.
Suffice to say for the most part.....it just can't be done.
If you think you can do it....have at it. Report back with pictures.