Comex Gold Swaps are short 50,000 contracts even with rising gold and silver prices. This week saw some consolidation of the rise in gold and silver prices since the start of the year. This is hardly surprising, because in four weeks, gold has risen from an intraday low of $1122.9 through $1200 with very little consolidation. Therefore, to tick back from $1219 to find support at the $1200 is only to be expected.
The underlying tone was one of physical shortages, making it hard for the bullion banks to close their short positions. Consequently, by early trade in Europe this morning (Friday), gold was up a net $6 on the week at $1206, and silver up 12 cents at $16.92.
The next chart shows the dilemma faced by the bullion banks. Their net swaps on Comex are still short by over 50,000 contracts, compared with last year in early January, when they managed to get an even book.
This post was published at GoldMoney on JANUARY 20, 2017.