When people talk about bank shorts in gold, it often sounds as if the story is mainly about the big U.S. banks.
But the latest numbers show a different picture.
Non-U.S. banks held 119,165 short contracts, compared with 102,370 held by U.S. banks.
So a larger share of the bank short position is actually held outside the United States.
What I find interesting is how much that changes the way the market should be viewed.
The “bank short” is not one homogeneous position held by a handful of U.S. institutions. It is a mix of different banks, client flows, hedging, market making, and other activity in the futures market.
At the same time, the sheer size of these positions should not be ignored.
Highly concentrated bank short positions can put pressure on gold’s upside and help keep prices lower, especially if those shorts continue to increase.
Some of those positions may be hedges against other exposures or may simply arise from banks acting as counterparties to client trades.
Non-U.S. banks now hold a larger gold short position than U.S. banks.
And that is a useful reminder of something that often gets lost in discussions about COMEX: the gold futures market is global, and large bank positions are not just an American story.
119,165 versus 102,370.
This time, the structure of the short may be more interesting than the size of the short itself.
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