Silver Manipulation May Be The Most Extreme In History

Much has been made in this commentary of the soaring silver open interest, which ought to be unprecedented in commodity market history.  – Bill “Midas” Murphy, co-founder and Chairman of GATA

The open interest in Comex silver hit another new all-time high yesterday.  As of Wednesday’s final open interest report, the open interest in silver was 189.7k contracts. This is the highest the open interest has been based on data I have going back to April 2005.

189.7k contracts translates into 948.5 million ounces of silver.  According to the Silver Institute, the total global silver mine output for 2014 was 877 million ozs.  The amount of paper silver open interest on the Comex is thus greater than the amount of silver mined in a year globally.

The ratio of silver futures open interest to the amount of silver warehoused on the Comex is even more absurdly disproportionate.   As of Wednesday, June 10 the Comex vault operators (JP Morgan, Scotia, HSBC, Delaware Depository, CNT and Brink’s) were reporting a total of 179.7 million ozs of silver in Comex vaults.  Of that, 57.8 ozs were classified as “registered,” or available for delivery (the rest was being “safekept” at the Comex by investors or commercial users of silver).

Based on these numbers, the silver open interest is now 5.3x higher than the total amount of silver on the Comex and 16.4x the amount of silver that has been made available for delivery.

GoldSilverManipulationNever in the history of the commodities markets has the amount of futures outstanding for any commodity been this extraordinarily disconnected from the amount of the physical supply produced and available for delivery.

Anyone who asserts that gold and silver are not manipulated using paper derivatives just based on the market action alone is either completely corrupted – with a motivated financial interest in denying the obvious – or is a total idiot.  But upon examining the Comex data for silver – and accepting it prima facie, which I do not (I believe the real numbers are even more extreme) – anyone who denies that silver is manipulated in extremis has likely received a full frontal lobotomy.

The blatant takedown in gold and silver signals to me that something is coming. I enjoyed Keith Neumeyer’s letter to the CFTC. When a major producer like First Majestic raises the issue I think the CFTC will have a more difficult time blowing it off than another diatribe from Ted Butler.  – John Embry

Briefly, the price of gold/silver is manipulated in two ways.  The first method involves “bombing” the Comex (either the trading floor or the electronic Globex trading system) will massive futures sell orders, typically during periods of low liquidity or when economic reports are released.   This causes the sharp sell-offs.   The second method involves price capping, which is achieved by meeting periods increased demand from buyers with added supply of futures.

If the allowable amount of gold/silver futures open interest was pegged to the amount of physical gold/silver available for delivery, it would be impossible for the banks to print an infinite supply of paper contracts to meet demand from buyers.  This is how every other commodities product operates.   In fact, isn’t this how every other commercial product market typically operates?

The motivation by the Fed/Government to keep a lid on the price of precious metals is certainly understandable.  If gold and silver were allowed to operate in a market of bona fide price discovery, they would almost instantaneously re-price at significantly higher levels.  This event would completely undermine the legitimacy of the dollar.  It would disrupt entire the massive wealth transfer mechanism being operated by America’s corporate, banking and political elite.   We’re talking about blood money.

There’s no telling how much longer this extreme manipulation can continue.  History has shown that market interventions eventually fail – often with serious consequences.  As I have suggested in recent commentary, I believe that the credit market is sending signals which indicate that western Central Banks and Governments are beginning to lose their ability to control the markets.

This whole thing is totally nuts. I still think silver will go bonkers within the next few months. Maybe that is a hope trade of mine, but I smell it as much as I smelled my biggest winner, the copper move of 1987.  – Bill Murphy

19 thoughts on “Silver Manipulation May Be The Most Extreme In History

  1. > As of Wednesday’s final open interest report, the open interest in silver was 189.7k contracts.

    We ‘ll see with the weekly cot report later today how it is dispatched.
    i’ll bet it will be again a “porn short” with managed money long refusing to give up.

    Andrew Maguire explain how bullion banks communicate between them days before smashing the price of gold and silver (NFP, events …), and all proof of manipulations he provided to the cftc , his testimony …

    https://teaser.realvisiontv.com/130358792

    But they need managed money (speculators, funds) to fleece them (long AND short).

  2. Its always “coming”.
    Blog afte blog talk about collapse. Next 13-26 months. In 3-6 months from now it will be in “3-6 months”.
    TPTB clearly have this fraud and manipulation figured out.

    1. clearly u have mistaken “figured out” with desperation…
      aint nothing “coming”…its already here if one possesses the “clarity” to see thru the smoke and mirrors shit show of the MoneyChangers…

      more Silver for me and the enlightened at phony paper prices….

  3. It is obvious that several commercial interests are abusing their hedging position limit exemptions. The number of longs that stood for June gold delivery is encouraging. Hopefully, silver longs will do the same.

  4. I hear a rumor that John Kerry was shot in France and did not fall off a bike.
    Imagine if this is true. Bankers being suicided all over the place and now maybe this.
    Something is up!!!!!
    Man the ramparts!!!!

  5. Can someone clarify if open interest includes naked short selling?? I always assumed OI is buyer with long option but isn’t there always a short seller on other end? If so, what is significance of high OI number?

    1. David, re-read my post. Your answer is in there. BY DEFINITION, whenever the amount of open interest exceeds
      the amount of physical commodity underlying the open interest by just ONE contract, that ONE contract is a naked
      short. Open interest means for every long position there is a short position. This is true for ANY commodity market.

      With silver, the amount of naked short interest is the highest in the history of the universe of any commodity.

  6. I just wanted to add that 7-8 years ago I took delivery of a couple of Dec. silver contracts.I had to pay in full by the end of Nov. which I did.I wanted delivery ASAP repeat ASAP.
    I did everything possible to get them QUICKLY. I got them in FEB.

    1. Let me add this also.The companies I did business with back then were none other than MF Global and Tulving Co. both of which are BK.

    2. Yep – we took delivery of Comex silver bars in April 2010 and we didn’t get the bars until mid-June – HSBC
      was the delivering party. Contractually they have 3 days to make delivery.

  7. > As of Tuesday June 6, 23 807 contracts were added on Silver managed money short position.
    8925 was the previous record high.

    Near 3 times the previous record !

    Price went down 84 cents.

    Commercials (bullion banks) covered 11 213 contracts.
    They covered 12 618 contracts on september 2012. (record)

    Short squeeze is looming.

  8. Great article, thoroughly enjoyed it. It reaffirms what has been suspected for quite some time now. However, as with so many revealing reports it stops well short of answering the obvious question, What to do about it ? Further by whom will this “it” be done ? And the ever fanciful inquiry When ? Thank you for sharing your work.

  9. > As of Tuesday June 6

    Typo error

    read As of Tuesday June 9

    23 807 shorts Silver contracts added in one week represent 23 807 * 5000 / 32150.747 -> 3707.4 Metric Tons

  10. The posts about the significant delays it took to remove silver bars from the Comex are very interesting. What excuse did the warehouse make for not providing timely delivery when you requested them? Did the bar serial numbers match the receipts? Just curious.

    1. For clarification the Comex short would have met his contractual obligations if he provided the receipt to the buyer by the end of the delivery month. The physical delivery issue would then fall on the warehouse.

      The warehouse owner can probably get away with delaying delivery. I would think that the bar owner would not have to pay them storage fees if they refuse to hand over the bar in a timely fashion.

    2. I don’t recall the reasons for the delay but would like emphasize
      the importance of taking possession.In 1980 or so I bought some metals from a company called Deke Perrera [spelling] and stored my metals in Switzerland.In the same time frame I bought a futures contract from a friend of mine who had moved to Newport Beach Ca. Within a month or so Deke had fraud allegations against it and my friend told me his company really didn’t buy a futures contract but if silver went up I would [probably ]get my money.[I sold]I wanted to take physical of my Swiss. account and was told if I remove metal from the country there was a 10% tax.

      1. Your experience really hammers home the importance of taking delivery. Better to get the bars out of the Comex and into a private off exchange vault.

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