Courtesy of Mish.
In the wake of the Gold Flash Crash six days ago in which prices suddenly plunged then recovered, numerous people have been wondering “who is the culprit”.
Will the Real Manipulator Please Stand Up?
At the top of the heap in demanding an investigation is a guest post article on ZeroHedge, written by Russ Winter, Open Letter to Gold Investors: Will the Real Manipulator Please Stand Up.
Winter maintains “The real debate should center on who is really conducting this gold attack activity. Financial journalists should be looking at this as well.”
I am amused by this kind of waste of time, but even more amused by the details that Winter disclosed.
The Commodity Futures Trading Commission’s most recent banker participation report on positions as of Dec. 1 shows the U.S. banks as four participants. They are not identified by name, but historically and deductively, JP Morgan is the largest and most dominant participant. Over the last quarter this report has shown that the four big banks have continued to build a net-long position, now at 57,408 futures contracts, or 5.741 million ounces.”
So is JP Morgan the short manipulator of gold as some suggest? At one time perhaps, but now I believe the answer is unequivocally “no” and, in fact, the complete opposite. JP Morgan and the three other U.S. banks have a large net-long position equal to nearly 15% of Comex open interest.
When Shorts Cover
For years we heard from GATA and others “JPMorgan and the gold shorts will be blown out of the water and eventually forced to cover their shorts at higher and higher prices. Gold will go to the moon”.
What happened? Somewhere along the line, JPMorgan became net long as the price of gold plunged. Now we are in search of a different elusive force allegedly suppressing the price of gold.
It’s always someone. And the same ridiculous articles appear over and over, with fingers occasionally changing the direction of the “big point”.
What Happened?
Clearly the JPMorgan conspiracy crowd was wrong about what would happen when JPMorgan covered. And with JPMorgan now net long where are the cries for JPMorgan to dump its now-concentrated net-long hoard of gold?…
