from King World News:
The billions of dollars of bearish options bets against gold closing above $1,300 in both Comex and the over the counter markets were grossly offside. But added to that, the COT Report we received on that Friday captured them almost all-in short — close to record levels. Their backs were against the wall, so something had to be done. This is often when we see official assistance and the full court press being brought to bear to prevent an imminent breach of these very large naked short bets that would have seen the $1,400s realized very quickly (in gold).
It comes as no surprise that the CME made an announcement that very evening that they were reducing margin requirements for gold and silver futures. Let’s think about that for a minute Eric: Naked short bets structurally within $20 to $30 of capitulation, (bullish) geopolitical events unfolding, and a bullish uptrend in the strong physical market. So what happened? The polar opposite of what we saw when the funds were long futures at $49 silver and $1,900 gold. Back then, with the funds naked long, the CME increased margin levels several times in a row to force out long positions.
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