Just as shorting can be used for hedging, so too can facilities of LME etc. You'll find a correlation between warehouse levels and commodity prices and shorting. When the warehouse is full, traders are not buying more, less demand, less buying, more shorting, price falls.
The shorting on HGO is correlating with futures prices and as a recent poster explained, is likely being used as hedging.
Great time to buy, page-71
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