What Matters Most in Gold and Silver

by Ted Butler

Having focused intently on the running open losses of the 8 big shorts (ex-JPM) for the past year, the latest price surge would seem to put the 8 big shorts in particular serious jeopardy. Simply put, the open losses ($7.8 billion, as of Friday, May 15) have never been larger, while the prospects for the big shorts buying back all or most of their short position at anywhere near breakeven have never been lower.

The biggest hope that the 8 big shorts had to buy back short positions at the sharply lower prices necessary for them to break even would seem to reside in aggressive selling by the managed money traders, either long liquidation of new short selling. But how much long liquidation is possible when existing longs positions are low (7 year lows in silver)? And how much new short selling is likely when the managed money traders didn’t short on the lower prices over the past month? And last week’s increase of managed money short selling in gold didn’t fare so well.

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