Banks Are Still Heavily Short Gold

One number from the latest Bank Participation Report caught my attention.

29 banks are holding roughly 221,535 short gold futures contracts on COMEX.

That represents nearly 60% of total open interest in gold futures.

That is a huge concentration.

Banks use futures for hedging, market-making, client activity, and as part of broader positions across the gold market. Looking only at the short side therefore doesn’t tell us the full story.

Still, when such a large part of the market is concentrated on one side, I think it deserves attention.

Especially given the history of precious-metals futures, where several major banks have previously faced penalties for spoofing and other manipulative trading practices.

For me, the most interesting part isn’t simply that banks are short.

It’s what happens to those positions if gold keeps rising.

If the price continues higher and banks keep adding shorts, that tells us something about the structure of the rally.

If they instead begin closing those positions aggressively, the effect could be very different. Short covering can add additional buying pressure to an already rising market.

And behind all of this sits the physical market.

Futures positions can be opened and closed quickly. Physical gold moving into central-bank reserves, private vaults, or long-term investor holdings behaves very differently.

That’s why I watch both sides and don’t treat COMEX positioning as the entire gold market.

221,535 bank shorts. Nearly 60% of open interest.