➡ The bank’s short position in gold and silver has decreased, indicating some short covering. Despite recent sell-offs, gold prices remain above $2500, and silver prices rallied back after a sell-off. The bank’s short position in gold reduced by 9400 shorts and added 2200 longs, while in silver, there was a reduction of 2200 contracts. This could suggest a shift in the market, but it’s too early to confirm.

You can see a reduction in the bank’s short position in silver and similarly you can see that as well in the bank position for gold. Well hello there my friends Chris Marcus here with you for Arcadia Economics and welcome on in as we are going to go through well a whole host of gold and silver data and certainly we are going to touch on how there’s actually some short covering in the past week as reported on the latest co-tv port that brings the bank short position in the gold side at least down a little bit from what was recently a record high so we will dig into all of that and more but let us first take a look at the gold and silver pricing it’s about 7 pm on monday night here then we see the gold price at 2535 which means that despite all of the sell-offs over the past couple of weeks now we still have a gold price over 2500 dollars and in silver where we saw a rally on monday this is already updated for the beginning of tuesday’s pricing but as you can see here following the sell-off on friday rally back a bit and the december futures are at 2070 so with that said let us dig in here then first a look at the latest co-t report for the silver side this was released on last friday which covered the report the period leading up to the end of tuesday trading meeting on the wednesday before that and as you can see here there was a reduction of 2200 contracts a reduction of the short position by 2200 contracts banks also adding 96 longs and this swap dealer category there so interesting to see that short covering and we’ve seen this before a couple of times in the past few months where covering some of these shorts certainly at an elevated price does that mean the shorts are getting overrun no we are certainly not at that point yet but at least raises the possibility are we to the point where the will not be possible to wait for the price to go lower to cover some of that short position certainly an indication headed towards that direction again a little bit early but you can see a reduction in the bank’s short position in silver and similarly you can see that as well in the bank position for gold where basically 9400 shorts reduced 2200 longs added so let’s call that about 12 000 contracts which you can see here on our bar chart.com chart and the green line down here is the bank short position slightly different from the commercials which includes the users merchants processors and then you have the banks in their own separate category and you can see this green line here had gotten to uh 253 000 contracts short i have to leave my mouse there but if you look slightly to the left right here that number will be the uh there was a week ago week earlier 253 almost 254 000 contracts short by the banks now back down to 242 so some short covering there and to put that in better perspective again here is the silver chart so you see swap dealer net and about a month ago as the price was coming down was not at a record but really you can see except for what we saw in 2016 that was the most short they have been and i believe that goes back as far as the data is available sit now slightly different picture in goldberg you see here until the slight reduction in the bank short position in this past report this one was a record so again where does that leave us uh traditionally when we’ve seen the position get that short there is usually a price decline and you can pause this and take a look at some of the various points there on this chart but there also is the possibility that shorts are forced to cover back higher i don’t think we’ve gotten there yet now certainly the news about what’s going on and tasks reporting that the potentially gold back partially gold back unit currency is on the docket for discussion at the bricks meeting next month depending on how such a thing goes and what’s announced or conceivably implemented could present a problem but i don’t know if we’re on the verge of the short position being overrun although certainly the price has been going up as the short position has been building and good chance that it could come the price would come down a bit or we could see a change in that pattern so in either case we’ll keep an eye on that going forward in terms of the overall commercial short position that’s in the blue bars here so you can see that has come in a bit as the open interest has also come in a bit and if we take a look over at gold similar although the commercial short position has not really come in quite that much and still on the historically large side and in terms of what is going on in the funds has been flat pretty flat over the past four weeks again the blue line here shows you how much silver is in the COMEX and the various ETFs and you can see these bars down here so the last couple of weeks it’s been pretty slow although overall net inflows especially on the gold side have continued albeit at a slower pace but ever since we had about two or three years of consecutive outflows which you can see right here or actually even going farther back so that blue line shows the metal was coming out and not entirely surprising to see it going back in we’ve been talking about that quite a bit recently especially ahead of the rate cuts that is that what finally draws the western investors into the market and some signs that that is beginning to happen even ahead of the rate cuts which we will look at the latest probabilities before we wrap up here but for now we’ll keep going with some of our gold and silver charts here is silver coin sales from us mint and you can see often the beginning of the year you have a big number and then they level off and that has been the case so far this year as well uh somewhat similar pattern here in the gold side and you can see that i’m gold from the u.s mint at least generally below some of the levels we’ve seen in the recent years and a little bit more mixed on the silver side but again there is the u.s mint figures we also also do have earth mint gold and silver figures and there you can see 2022 obviously was quite an active year and as well as 2021 much lower than that in gold coming out of australia and a similar pattern here in silver so you can see that 2022 year big active year in australia as well and has leveled off so far so that is the sales at the Perth mint and yeah here are a few more charts just in terms of some silver data i showed this one last week but i think it’s worth showing again because here you see china silver imports and a big spike recently these are the four month changes so along with a lot of the other data that we’ve seen and heard and talked about certainly matches anecdotally a lot of the things that we are hearing out of china here we can take a look at the inventories in shanghai which have been coming down from 2021 there was a spike of metal back in uh or the past two months slowly coming down a little bit although we had gotten uh i don’t want to stay close to running out but certainly when you see where we were back in 2021 and then the levels that we’re at today certainly i think you hear a lot of people talking about the decline in the shanghai inventories this includes the shanghai gold exchange and the shanghai futures exchange so adding the two main inventories in china and a quick look at silver in the registered on the komex where again we did have that dip getting below 30 million ounces last year and have seen now almost a good 50 million ounces added since then so now in terms of a few other notes obviously in the past week i’ve been talking quite a bit about those stunning comments from chris ritchie of silvercrest where he said that the true costs which include additional items be it that beyond what is just included in the cash costs or the all-in-sustaining costs they calculated that and their total true costs came to 25 dollars pre-tax and to put that in perspective i did come across this from the visual capitalist that does a lot of great silver charts that pop up from time to time it’s interesting here you see for north america all-in-sustaining costs their average is 1944 now if we go to silvercrest which again is known as one of the lower cost silver producers you hear that you see that they’re all in sustaining cost so after the things that have happened in the first half of this year for reduction to 2024 guidance of 1490 to 1575 so silvercrest one of the lower cost producers is issuing all in sustaining cost guidance around 15 bucks and they said their true cost when all factors were included was already over 25 so if the average is 1944 and they’re facing anywhere near a similar cost structure as silvercrest silvercrest added 10 bucks on when they got their true cost so that’s obviously a rough metric that we’re comparing here but hopefully that puts it in context here you see in central and south america they’re reporting pretty close slightly below the silvercrest range but again if they had a similar cost structure not getting cheap to mine silver and i don’t think that is going to change so somewhat of a floor not that it cannot go below that in the short term but either case i just continue to believe the silvercrest news there was quite stunning in what they were pointing out so a few last notes before we come towards our end although i have something special before we wrap up again here we see the gold ETF flows for august western demand persists and that has been the case for a couple months global gold ETFs all inflows four months in a row all regions recording positive inflows with western funds leading the way and again in case you missed it there was a report from the TAS news news agency that indeed the unit which we’ve talked about plenty and tried to put in proper context not saying it is a done deal but certainly continuing reports that it is not just an idea on the internet but something being discussed within russia and TAS confirming that at the upcoming meeting on uh kazan russia in so a day after russia increased their allocation they plan to spend in the next month for gold and foreign currencies and then also we found out on friday russian gold holdings now at a record of 188.8 billion and we can see that here and trading economics gold reserves in russia increased to 2035 tons and reaching an all-time high of those two 2035 tons in the second quarter of 2024 so if you want to take a little bit of a longer look you can see what has been happening here not perhaps a substantially large increase also is russia reporting everything that they hold fully certainly a fair question and i know there’s a lot of skepticism that that is the case and anyway interesting to see those announcements shortly before the meeting and let’s see we have two three last notes here a quick one in terms of our fed probabilities for now next week’s meeting of the fed we see 30 chance of 50 basis points which personally i feels a little bit a touch high yet uh either case 30 percent for 50 70 70 percent for 25 basis points and lastly i did want to thank first majestic silver who brought us today’s show and as you know last week they did their deal to acquire gato silver and fortunately i was able to find one interview where keith is talking about the deal and gives his thoughts which certainly i think was helpful explains their reasoning a bit hopefully we’ll be able to catch up with keith soon and get his thoughts directly but either case uh i’m putting this one as well in the description field below so fortunately it is not on youtube so i can’t link to it at the end here but anyway uh that one that is in the description field below so that way you can hear exactly what keith is about the deal that will be bringing free cash flow and um hopefully will be a nice step in turning around what has been a tough stretch over the past couple of years but either case uh certainly recommend watching this one and with that said i’m gonna wrap up for now but hope you’re having a great day out there and we will see you again tomorrow
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