Loading ...One of the key factors keeping silver’s price suppressed over the past year, even as gold surged, has been the heavy short-selling of COMEX silver futures by swap dealers—primarily the trading desks of bullion banks such as JPMorgan and UBS. This was a deliberate effort to cap silver’s price (check out an egregious recent example of this kind of manipulation). In the process, they amassed a massive net short position of 30,233 futures contracts, equivalent to 151 million ounces of silver—nearly one-fifth of the annual global silver production. This staggering figure highlights the immense downward pressure exerted on the silver market.
What’s even more astonishing is how much of this massive short position in silver futures is naked, meaning it isn’t backed by physical silver. It’s merely “paper” silver being dumped onto the market to suppress prices. However, once silver finally breaks out, it could trigger a wave of short-covering—when traders who bet against an asset through short-selling are forced to buy it back as prices rise to limit their losses. As the price climbs, these traders become increasingly desperate to close their positions, further fueling the rally.
If the buying pressure is intense enough, it could even lead to a short squeeze, dramatically amplifying silver’s upward momentum. Given the sheer size of their short position, bullion banks stand to lose approximately $151 million for every $1 increase in the price of silver—a setup for a major price surge. Now, just imagine what will happen as silver climbs by $5, $10, $20, and beyond from this point.
https://www.zerohedge.com/precious-metals/why-its-silvers-time-shine-now