by Ted Butler, Silver Seek:
The last couple of years have been significant in silver (and gold), not particularly price-wise, but in other important ways. For instance, 2020 was particularly note-worthy in that JPMorgan was partially brought to justice for its many years of manipulating the price of precious metals on the COMEX and agreeing to settle with the Justice Dept and CFTC for a reported $920 million.
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Of course, the DOJ and CFTC merely scratched the surface of the real ongoing COMEX silver and gold manipulation and wimped out from charging JPM (and the CME Group) by sticking to spoofing charges and not the overwhelmingly compelling evidence of a long-term price suppression and manipulation. But my most important takeaway was that 2020 marked the exit by JPMorgan from the short side of COMEX silver and gold futures and its double crossing the other large commercial shorts after ten years of non-stop manipulation.
2021 saw the formation of the #WallStreetSilver Reddit movement and marked the first time ever (in decades) in which the CFTC seemed to agree with me or at least didn’t argue forcefully against my contention that the concentrated short position in COMEX silver futures was manipulative to the price. The Commission’s response to my congressman indicated it would forward my concerns to its divisions of Market Oversight and Enforcement.
The Commission not disagreeing with me may not seem like much, but I would point out that the concentrated short position of the 4 largest commercial silver shorts on Feb 2, 2021 (the date referenced in my letter) was 65,262 contracts and has never been higher since. The most recent Commitments of Traders (COT) report, as of Dec 27, 2022, indicated that the short position of the 4 largest shorts was 44,198 contracts, the equivalent of 105 million ounces less than it was on Feb 2, 2021, and after a fairly significant rally in which all key moving averages were decisively penetrated to the upside.
Did the Commission warn or “jawbone” the big commercial shorts to refrain from adding the quantity of short contracts seen in the past or did the commercials wake up and smell the coffee on their own; or neither, meaning the short position will grow from here? Time will tell, in the form of subsequent COT data, but to this point it does look and feel different from the past and “different” is always on my mind in looking for a change in the routine of the decades-old manipulation.
With that prelude, let me turn to the year 2022 and what I see as the most important issues of the year, which, in my opinion, has been the most momentous year of all in the 38 years in which I have studied silver closely. Upfront and as I think I’ve already indicated, what makes this past year the most momentous of all is not due to the typical things trotted out, like inflation, interest rates, the stock, bond and real estate markets, the economy, the dollar or anything of the type, including a devastating war and the most divisive and destructive political scene I’ve ever witnessed.
Quite frankly, those issues are things that haven’t made a bit of difference to the price of silver or gold this year, but I won’t be so presumptuous as to conclude such issues won’t matter in the future. I hate to disappoint anyone, but all such factors are so low on my totem pole of what matters most to the price of silver that it bugs me to even mention them. The only things I’m concerned with are developments in the physical market, primarily wholesale (1000 oz bars), and the manipulative positioning on the COMEX (and this year in SLV), always with a sense of what the regulators may be up to. And, man oh man, there is no shortage of such factors this past year.
