The Silver Short Bubble

For the first time ever, total Comex silver open interest exceeded 200M contracts yesterday, settling at 200,273. This means that the coming Spec short squeeze is going to be violent and substantial. And why isn't anyone calling this a "bubble"?

The final open interest numbers for yesterday are in and they are truly remarkable. Gold, which declined by $7, saw its OI rise by over 11,000 contracts to 430,978. This is the highest Comex gold OI since late March. Since yesterday was a CoT survey day, there's no doubt in my mind that this week's report will show another substantial and bullish improvement in the gold CoT structure. Why? For the Wed-Tue "CoT week", gold was down $5 but total Comex OI ROSE by over 15,000 contracts with 2/3 of the rise coming Fri-Tue when price was declining by over $25. That's A LOT of fresh Spec shorting in gold and it will likely move the gold CoT to a bullish structure not seen since the early November lows last year.

That's all well and good but, obviously, the point of this post is silver so let's get right to it...

Yesterday, as price was being smashed nearly 2.5% or 40¢, total Comex silver OI rose by another 4,909 contracts to close at 200,273. That's the first time in the history of the Comex that total OI has exceeded 200,000 contracts.

  • First of all, why now? Why is silver OI at record highs when price is at 5-year lows? And where are all the "bubble callers"? They were out in force four years ago with price in the $40s and total OI at 140,000. Why can't this current time be called a "short bubble"? It clearly is. I guess it's only a "bubble" when it fits the narrative you're trying to promote.
  • Let's do some math. There are 5,000 ounces of paper silver behind every Comex contract. Multiply 5,000 X 200,000 and you get a total Comex obligation of over 1,000,000,000 ounces of silver. Hmmm. Last year's global mine supply was just under 900,000,000 ounces and the TOTAL Comex vault shows holdings of 181,000,000 ounces. How is it even legal to print 200,000 contracts when there's only enough silver in the vaults to cover less than 40,000?
  • On the topic of mine supply, the WGC estimates total global gold mine supply at about 92,000,000 ounces. Total Comex gold OI at 430,978 represents 43,000,000 ounces or about 47% of total annual mine supply. In silver, as noted above the percentage is about 112% of total annual mine supply.

From a CoT standpoint, this is all extraordinarily bullish for paper silver. As mentioned earlier, the next report is due Friday and it will be based upon these numbers from last evening. For the CoT week, silver was down 21¢. Remarkably, over this same period, total silver OI spiked by 9,500 contracts from 191,774 to yesterday's 200,273. From a CoT perspective, we are back to a very bullish extreme in silver, too.

And what about the short squeeze that we've been expecting. OH, IT'S DEFINITELY COMING and the growth of Spec short open interest this week only adds more fuel for the fire. All we need is a spark. We almost had that spark last week after the Fedlines but silver failed to cross its 50-day moving average and fell back. The "doubling-down" on Spec short positions this week is simply accelerant for the fire once it begins. The chart below can't make it much more clear for everyone:

In other news today, the Greek situation is reaching a true crisis point ( and the US economy is slipping into recession ( Meh, whatever. The HFT algos don't give a damn about such arcane notions as fundamentals, all they see is a declining yen and they sell "gold" accordingly:

I need to get this posted so I'll just leave you with this...

In the 3.5 years since MFingGlobal when I officially quit trading, rarely have I been so tempted to wander full force into The Casino. This current situation is so extreme and the "short bubble" so HUGE that it is very difficult for me to remain on the sidelines. However, on the sidelines I shall remain. This personal restriction does not apply to you, however, my dear reader. Best of luck, be patient and prepare accordingly.



CPE's picture



Arag's picture

I second...

...what CPE said !

cashonly's picture


a nice solid thurd.

silver66's picture

Sorry Marchas 45

Had to take your spot


heathbr's picture

We need Howie

Greek Deal or no Deal, just let them pick a case and get it over!

J.P. Cubish's picture

Thanks Turd

Exciting times in silver.

tyberious's picture

Needless to say..

Turd Ferguson's picture

From Dave's column


This is excellent:

“James Mc,” a valuable daily contributor to’s nightly “Midas” report commented last night on the Comex silver market in comparison to the CME lumber futures market:

Total North American lumber production for 2015 (est.) is 60 billion board feet. At an average of $400 mbf that translates into $24 billion dollars. Keep in mind this excludes the rest of the world’s lumber production, which could easily be double that amount. On the other hand total world silver mine production for 2014 was estimated by GFMS to be 877 million ounces. At $16 oz. that is a total of $14 billion. Silver OI is 45.45 times greater than lumber OI. with physical silver production being only a fraction of lumber production in dollars. Lumber futures O.I would have to be 100 times greater or more to compare to the outlandish oversized silver futures. Or, put another way lumber futures would have to reflect hedging 68 billion board feet, more than the entire year’s production for North America to be scaled to silver Any arguments for a higher silver O.I due to hedging for recycled and above ground silver supply are dwarfed by the stark reality of the above figures. To say the silver market is normal is like having referred to hurricane Katrina as a passing thunderstorm.

Response to: Needless to say..
GuerrillaCapitalist's picture

Why Hasn't Anyone Called this a Bubble?

Mr Mayor and Neighbors:

I'm reminded of a puppy that just shit on the living room rug and turns her back, not seeing the stinking pile, thinking it's magically gone. I wonder if tptb have the same mindset.

I too am tempted to get back in the game and trade this crazy market, then I wake up and buy another tractor or duplicate piece of equipment and sanity returns.

As I've said many times, metal is on sale, the blue light is flashing. I don't think these prices will last long. I'm in agreement with Bill Holter that we may very well wake up one day and find silver and gold have gone no offer. No metal to be had no matter how many fraud notes to stack in front of the holder.

Back to work,


marchas45's picture

Hi! Turd

Had an awful time trying to open up your site and posting. O! Well at least that is my excuse. Lol Keep Stacking

After Reading the above maybe it's time for another Recliner Report and  stacking some more of the My Precious My Precious. Keep Stacking

Turd Ferguson's picture

By the way


I'll likely remove the restriction and send this over to GATA later today or tomorrow.

Pining 4 the Fjords's picture

Casino Federale

tyberious's picture

Adapting To Changing Markets

Wednesday  24 June 2015

"There is a legitimate question as to the existence of free trading markets, anymore.  Over the past several years, there has been an almost total takeover of the stock market by the Fed and a few controlling Wall Street entities.  It is beyond question that the precious metals market have purposefully been suppressed by the same factions in order to achieve distorted and untenable political means.

We do not trade the long side of the stock market, with a few exceptions, nor do we trade the short side of gold and silver as a stance against central planners’ intended manipulation of these markets.  Forex currencies are totally bank controlled, so our participation there is limited.  The Fed is in total control of the broken interest rate sector, so we do not trade the interest rate markets, at all.

These decisions limit what can be traded with what remains, and with what remains, we do not trade most of the New York softs: coffee, cocoa, and sugar, sugar being more of an exception.  Crude oil has also become a political tool and can occasionally be volatile, so we are a cautious participant in making trade recommendations in that arena.

What we have been doing is placing what markets in which we do make trade recommendations into a specific context whereby a set of rules have been formulated in order to make any recommended trade decisions.  We began implementing this format this month, June, while still tweaking the rules to fit developing market conditions.  It is an ongoing process."

tired-and-weary's picture


As a new subscriber, is there anywhere I can read about Turd's decision to quit trading? 

Dr Jerome's picture

I am scratching my head.

The OPM 100 ounce bars are .35 over spot at Provident? What's up with that? I have never seen them below .49 over spot. the 10 ounce bars are equally cheap.  Doesn't sound like silver is scarce at all. But the bars are listed as "stock delayed." other bars are out of stock. The also have AU one ounce bars for only $17 over spot... $16 if you order a batch of them.

How odd... lowest premiums I have ever seen.

Turd Ferguson's picture

I'll save you the time


I had always had my futures account with Lind-Waldock. They were then merged into MF Global.

Fortunately, the metals peaked in April and September of 2011 so, by the time MFG collapsed and stole everyone's money, I had withdrawn nearly everything, only leaving $3,000 cash in my account.

At that point, I swore off trading forever and have only very occasionally dabbled in options ever since, only buying one call at a time. On a larger scale, this came at the right time however. Managing this site is a full-time, 12 hour/day commitment so, frankly, I simply don't have enough time to actively trade, anyway.

Response to: MFingGlobal
2c piece's picture

Re question for Rob Kirby

A appreciate the thoughts of the member who responded to the question.   Guess I should give some background for the question. 

I was thinking about the 1.5 quadrillion dollar derivative market in a world where the world’s GDP is about 60 Trillion dollars.  I could see how the banks could rehypothecate to get a number that high but I could not see who could come up with that amount to take the other side of the trade.  I emailed Jim Wiley with that question.  He was kind enough to respond within a couple of minutes. He explained to me that the banks were on both sides of the trade as in a fixed auction controlling the price and setting it wherever they wanted.  (I am paraphrasing).

My next thought was why would they take the trouble to do this?  The most advantageous for them answer I could come up with was, with the bail-ins in place, this would be a simple mechanism to appropriate most of the populations bank deposits.  Hence the question.

tired-and-weary's picture


Thanks for the response. Yours tired and wearily... How much longer can the madness continue? 

Goldencross's picture

It's all BS! Washington

It's all BS! Washington ordered Brussels to keep Greece in the Euro. So Greece stays in the Euro. Simple!

Owtovit's picture


With a situation like this just go for it and dip ya toe back into the "Murket"...self imposed exile be damned, I bet Mrs F and the LT's would like a surprise holiday/present

Turd Ferguson's picture

I hear ya


It's extraordinarily tempting. Maybe some September calls? I'd imagine that the $17 variety are relatively inexpensive.

Response to: Turd...
Ned Braden's picture

Celebrating 40 Years of Gold │COMEX Gold Futures (GC)

amarula4's picture

@I hear ya Submitted by Turd Ferguson

you've still got it, Big T - use the Force

Texas Sandman's picture

Celebrating 40 years of rape and pillage Crimex Gold Futures

We make money the old fashioned way... We steal it!

Owtovit's picture

@i hear ya

You the the muppet ala GS....that's why I only stack...time for a Hard Assets Alliance raid....

tyberious's picture

$440 Million is All That's

$440 Million is All That's Stopping the World's Biggest Fiat Ponzi Scheme From Imploding

When it comes to the economy and precious metals manipulation, Andy Hoffman is second to none in terms of his knowledge and understanding of what is going on and where things are heading. The gold cartel is running on fumes, according to Andy Hoffman. The COMEX, as described by Andy, is a paper exchange with essentially no inventory. For the first time in history, June’s gold delivery demand exceeded the COMEX's record low registered inventory. The COMEX has been used to manipulate prices downwards, and the truth is every attempt in history made to suppress precious metals prices downwards has always failed. Exposing the truth behind the COMEX's paper exchange could be the trigger that sends precious metals through the roof.

The record low inventory of registered gold is just 370,000 ounces -- worth a mere $440 million at current prices. The reality is that this is virtually nothing, and any large buyer or group of buyers could take this out by demanding delivery.  Only a mere $440 million of gold -- if it even exists -- is all that is keeping history's largest fiat Ponzi scheme from imploding and sending gold soaring.

Turd Ferguson's picture

Good in theory but Comex


Good in theory but Comex rules only allow for 1,500 contracts per customer. I'd LOVE to see it happen, though.

Mickey's picture

Kirby Question

Is there a website somewhere that shows how many arrive at teh plus 1,000 trillion derivative number when ht eOCC shows much less. I assume some of that is Europe.

But many of the folks in this toss out that 1,000+ trillion  number and its been accepted as the holy grail. I'd like to verify that.

Turd Ferguson's picture

My country...universally despised


Seriously, what's the point of this? The arrogance is breathtaking. Perhaps all countries spy on each other but through facilities like this?

Turd Ferguson's picture

Very nice day for silver...


...considering the circumstances.

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