Swap dealers hold 49,804 short contracts versus 21,199 long contracts.
That leaves them net short 28,605 contracts — roughly 143 million ounces of silver.
That is a very large number.
For comparison, COMEX registered inventories currently stand at roughly 99.4 million ounces of silver. The swap dealers’ net short position therefore equals about 144% of all registered silver on COMEX.
And their gross 49,804 short contracts represent nearly 249 million ounces — around 2.5 times the amount of silver currently sitting in the registered category.
That does not mean banks will have to physically deliver all of those ounces. Most futures contracts never end in physical delivery.
But I think the comparison tells us something important.
The banking and dealer side of the market remains massively short silver.
When silver starts moving higher and new short futures are added against that move, additional paper supply enters the market. That can absorb part of the buying pressure and slow a price move that might otherwise be stronger.
This is one reason why watching physical silver supply alone does not tell the whole story.
On one side, there are fewer than 100 million ounces of registered metal available for delivery.
On the other, there are hundreds of millions of ounces represented through futures positions.
143 million ounces net short versus 99.4 million ounces registered is a ratio worth watching.
As long as swap dealers are willing to add more shorts into rising prices, they can remain a significant brake on the market.
The much more interesting moment comes if silver keeps rising — and that paper supply is no longer enough to absorb the buying pressure.
Source: CFTC Commitments of Traders (COT) Report
Full COT positioning data: https://silverdominion.com/market-tools/gold-silver-cot-positioning/
Leave a Reply