They Better Pray There Is No Short Squeeze...

Tyler Durden's picture

Well, they've finally done it.

As the following chart of the day from Bloomberg shows, as of this week, hedge funds have made "the biggest bet ever" against gold by taking Comex gold shorts to all time highs.

To their reflexive benefit, we will admit, they have managed to push the price of gold lower, not much... but it is lower (whether with the BIS' assistance or not is irrelevant). It is a different question if the price of gold is low enough to reflect such a record bearishness. But the biggest question is what happens if there is a catalyst to launch a covering rally: such as, hypothetically speaking of course, the People's Bank of China were to announce that it has in the past four years in which it provided no updates on its gold holdings (last is as of 2009), accumulated some 2000-4000 tonnes of gold.

Surely, that would be most unpleasant to all those record shorts, and the impact on the price would be most parabolic. Why, all those shorts better indeed pray there is no short squeeze now or any time in the future...

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NidStyles's picture

Well, that is something at least... It is impressive considering the amount of paper they had to push out to do it.

TeamDepends's picture

There were several medium paper cuts.  It was as if a tornado rolled through....

Pinto Currency's picture



They are going to get squeezed by the physical gold shortages being reported on the exchanges in Shanghai, Mumbai, Hong Kong, Dubai, Singapore, etc.

Pladizow's picture

If I take of my golden shorts, all will see my naked long!

TeamDepends's picture

And here, laid bare, is the essence of the squeeze.

The Thunder Child's picture

Haha bunch of Fed Faggot lackies, good luck shaking this long...hope you get your balls squeezed off.

Stuck on Zero's picture

They aren't worried.  Ben's got their backs.



And Ben's not worried because he's got the country by it's balls.

knukles's picture

And the country'ds leadership are not worried because they have no balls

SilverMaples's picture

Actually name me the funds that are short paper gold beside Fed onshore LLC ... and if they fudge BLS data they sure aren't fudging comex data ... that would be unethical isn't?

markettime's picture

Might be time to buy some puts on gld again. Then I can sell at a gain and buy some more gold. 

brockhardman's picture

They can talk about the "price" of gold/silver all they want.  But I'll tell you what, I will just keep stacking and when the paper and physical markets separate, I will tell THEM the price at which I will be willing to sell it.  I win.

Herd Redirection Committee's picture

Yep, thats the thing with manipulation.  All they are doing is providing a 'suggested price'.  You don't have to transact with them (esp. sell) at those prices.

nope-1004's picture

Bernanke you incompetent PUSSY.  Take Gold and Silver to zero, you wimp!  C'mon.... show your power, you pink toed pussy.  I want gold and silver at zero to show the world the strength of the US economy.  Don't let me down now, you wimp.  Show some balls.


TwoShortPlanks's picture

“The Price Discovery Mechanism of Central Banking: It really looks as though the Price Discovery Mechanism is not so much the traditional function of Supply & Demand, it now looks bent toward Liquidity, the perception of the delivery of that Liquidity, not necessarily delivered, and the eddies of greed and fear which congregate to feed, sometimes temporarily, as that Liquidity moves to find a new place to park, freshly cleared and clearly marked at the behest and agenda of the Central Planners.”

Manthong's picture

I don’t understand.. 

Not a single one of my troy ounces seems to be less than 31.1034768 grams.

I do not see a shortage.

Pinto Currency's picture


Post Cyprus, there has also been a silent run to physical gold in the West and many owners have found that their allocated gold is not available for delivery.

The bullion banks and the central banks have essentially been running a fractional reserve Ponzi scheme and it has become evident that the physical is not there.

12ToothAssassin's picture

Youre saying they will take it in the shorts?

Oh regional Indian's picture

Yamashita's gold people.... do your research.

What if three olympic size pools became 300 olympic sized pools.

What would that do to price? OR value even.



Yamashita's gold...

NidStyles's picture

That fucker needs to learn how to write and get to the damn point rather than going off on tangents and blathering on.

Lore's picture

The naked short slam in April was allegedly an act of desperation meant to shake loose bullion from weak hands in order for the COMEX to meet big-pocket delivery demands. Default was averted for a few weeks.  Now, the psychopaths seem to be ramping up for the same manipulation on a much grander scale.  It's very hard to see how this time could not be the last time.  Real market participants are LEAVING. 

It's so EXCITING!  At times like this, it's a privilege to be here on ZH among people who give so generously of their time and brains.

NidStyles's picture

Honestly, I have been tracking this whole ordeal for three years now. Some have been at it longer than me.


The start of the final game was back in November. We are just now starting to see the results of endless paper printing. I agree with on this being it, outside of drastic government actions that would likely spur a social crisis. I don't see how they plan on holding this up any longer. Almost everyone I know that was in the markets are out now, and my only holdings are miners that would cost more than I am willing to pay the bastards to pull out of. I would rather the miners keep the money, they earned it for getting dicked so hard IMO.

cynicalskeptic's picture

Haven't the bullion banks gone net LONG while doing their best to exit their short positions?  Perhaps the hedge fund guys are reading their (heavily manipulated and painted to perfection) charts without realizing that there's a much larger game afoot.  It seems that faced with heavy demand and rising prices, the bullion banks (with Fed approval) shot their wad in trying to suppress prices (and pick up some physical cheap).  They've taken advantage of the low prices to cover outstanding short positions as well.  But the wave of buying they let loose makes it difficult to continue this game without all physical stocks being depleted.

If the hedge fund gusy are reading the chartts and seeing a long term drop in gold prices - and 'lessening demand' (despite all the physical buying in the real world) they they may end up being the suckers in this game.  If they're reading the outflows from GLD as investors giving up on gold and are actually listening to the BS touted on MSM about the 'end of gold' then you really have to wonder how smart they really are...... or are they saying one thing and doing another?  It seems like the scramble is on to get gold  and HOLD IT PRIVATELY (out of the reach of banks and states).

I would be really surprised if the bullion banks haven't figured out a way to get out of the awkward spot they're in and are playing EVERYONE - including the Fed and Treasury.  Wouldn't surprise me at all to have them settling accounts in cash at some point (at a very low price) when it later turns out they've built up substantial stashes of their own that are beyond reach of anyone else.

Or Bix Weir is right - the US is far richer than anyone can imagine and we're screwing the world for as long as we can before the US defaults and then - isolated from world trade - rebuilds anew after hanging the financiers that caused so much grief.  Not betting on that scenario though.

crito's picture







zhandax's picture

ORI very good point, and they have driven it down almost to average production cost, but the tell is whether they can drive it below that, and I have serious doubts.

TwoShortPlanks's picture

"whether with the BIS' assistance or not is irrelevant"

Noted, thank you!

Cacete de Ouro's picture

The London Gold Fixing is rigged. The Bank of England supplies liquidity in the form of metal to 'moderate' price swings. They have always done this. So the Bank of England is what you would call a Liquidity Provider. But in this case it is a liquidity provider of last resort that is always available. So it is a Price Manipulator. Just ask Michael Cross of the BoE. During the Fixings the Bank of England comes in with supply when needed to keep the fixing price lower than it would otherwise be by supplying metal. They used to sell gold into the Fixings and buy it back later. Terry Smeeton did this. Now they mainly just switch it around like a game of musicalchairs, using debits and credits and IOUs. This explains the liquidity management that JP Morgan and the other clearers do. The whole LBMA system is corrupt and heopfully will implode soon.

NidStyles's picture

I would like to just say that I like your style.

RazvanM's picture

Me I don't want to see the Bernanky balls. But I would really like gold & silver at zero, or maybe negative prices.

worldtraveler's picture

"They can talk about the "price" of gold/silver all they want.  But I'll tell you what, I will just keep stacking and when the paper and physical markets separate, I will tell THEM the price at which I will be willing to sell it.  I win."



Wow, you tell them - dream on

bill1102inf's picture

LMAO, as if anyone would even want it.  And btw, thats not how the transaction would occur, just like now, you can say you want $3000 for it, but it is only worth what the next person is willing AND ABLE to pay.

saulysw's picture

Gold is divisible, and does not have to be sold in whole ounces. Maybe people only get a few grams for what they are ABLE to pay. It doesn't stop the transaction.

Hive Raid's picture

Again, PM prices seem most correlated to the rate of change in money supply. This does not indicate manipulation.

Compare the M1 and M2 rates of change here:


...With the Multi-year gold 2000-2013 chart here:


Given that relationship, it's not surprising that bets on lower PMs coincide today with increasing talk of tapering.


Pinto Currency's picture


Compare the value of available gold with the $100 trillion bond market that the central banks have created.

James_Cole's picture

As the following chart of the day from Bloomberg shows, as of this week, hedge funds have made "the biggest bet ever" against gold by taking Comex gold shorts to all time highs.

Good to see this article point out who's actually 'btfd' ....or wait they didn't make that super obvious connection, my bad. 

drdolittle's picture

Small specs have very low long exposure. Bet agains the little guy.

Large specs get it wrong at the inflection points all the time. Bet against extreme positions.

Fuck yeah! I'm gonna order some more phizz today!

TwoShortPlanks's picture

Are you lost or something?...welcome to the wrong side of the railway track!

Bring the Gold's picture

I think you mean REPORTED money supply. The money supply provided by shadow stats continues to go upward and onward. But I suppose you're right what's not to trust in the last two adminsitrations and the FED?

drdolittle's picture

Yep. And there's no inflation either. I must just be buying more stuff to make my grocery, water and electric bills go up.

NidStyles's picture

Except in the real world where M3 is used as money, and not M1&M2, you are ignoring the important portion of the ratio.

DoChenRollingBearing's picture

Bought a little physical just today...

:P   !!

TwoShortPlanks's picture

Got your Auto Delete message...Sly Dawg!

Thanks, and will do.

I can see a ZH reunion one day...possibly political prisoners in jail at this rate.

DoChenRollingBearing's picture

They have FEMA Camps down where you're at?

TwoShortPlanks's picture

Nope, the whole island is a prison, or was. FEMA-AUSTRALIS.

cynicalskeptic's picture

You mean China's source of raw materials and future resort?     Methinks you'll be trading one master for another in the future.

God knows what the US will become.

GeezerGeek's picture

Speaking of what the US will become: has anyone else seen trailers for the movie "Purge"?

drdolittle's picture

I think ther should be some ZH get togethers. It's not like the DOJ hasn't obtained all our records already.

NidStyles's picture

I hope you don't plan on going boating soon.