Why won't the miners fight back?, page-13

Daytr

I feel a little sympathy for the likes of All4One and Siamese Parrot and their conspiracy theories.

It is a fact that banks hold the lions share of the short interest in Comex Gold futures. That sort of information gets about because there are second and third parties involved in the transactions and an independent observer of the futures market could be forgiven for thinking that the banks are sitting on huge open short positions and have a major interest in the price going down.

But they are wrong.

The open market doesn't get to see the OTC long positions in swaps and forwards held by the banks that the short futures positions are hedging. They don't realize that the banks have negligible net risk and have little interest in which way the PoG moves beyond their short term trading positions.

However, the miners do know about these OTC transactions because they are often on the other side of the deal selling gold forwards. Maybe that is why gold miners don't complain about market manipulation. They actually know what is going on.