Dave Kranzler: 2018 should be bullish for the precious metals sector

By Dave Kranzler
Investment Research Dynamics, Denver
Wednesday, January 17, 2018

Usually I'm loathe to stick out price targets on the markets, especially gold and silver, because of the undeniable market intervention of the central banks -- market manipulation that is so blatant now that it is denied only by card-carrying idiots.

Gold and silver had a sharp run-up in the last two weeks of 2017. But the abrupt move in gold was accompanied by a rapid rise in the gold futures open interest on the Comex. The "commercial" net short position in Comex gold futures -- that is, the position of "the banks -- has increased by 100,000 contracts (from 120,000 net short to 220,000 net short) in just four weeks through the most recent commitment-of-traders report. That's a net paper gold short of 22 million ounces, or 623 tonnes of paper sold short.

As of yesterday the open interest in gold futures increased another 27,000 contracts, most of which, based on the trend in the COT positions, can be attributed to a continued increase in bank short interest.

To put this paper gold short position in perspective, the Comex reports that its warehouses "safekeep" 9.2 million ounces of gold. (This number is unaudited.) That's 11 million ounces less than the bank net short position. However, only 586,000 ounces of gold are reported to be "registered," or available for delivery. The ratio of the paper gold short to deliverable gold is 37:1.

In other words, each ounce of deliverable gold has been "hypothecated" and resold 37 times. ...

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