“This is good because it would appear that the major bullion banks, who typically position themselves ahead of the next major move in either direction, are increasingly long, and on paper (they are) very net-long.
The bearish news is we are not sure what their total picture is. By that I mean there is an enormous OTC market which is extremely opaque, and so it is very possible that they are net-short, and possibly very short in a very highly-levered but opaque OTC market.
Another area that we have very little vision into are all of these unallocated gold accounts. I’ve been unable to find anything that estimates the ongoing liability from the IOU’s that are outstanding from all of these unallocated gold accounts that JP Morgan, Goldman Sachs, and the other bullion banks possess.
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