Special: Bank Physical Market Stress Now all But Certain
Gold and now Silver Price being kept in check by any means necessary.
“The thing about being the biggest in commodities trading is, eventually your legacy positioning gets too big and your trades get too transparent for the market to handle if you have to exit risk. One mistake, and competitors will take you down, or giggle as your arrogance takes you down for them.”
The topic at hand is an evolving/progressing one, touched on in almost every Sunday Discussion and focused on in these two posts prior:
What follows is an opinion and if correct, essentially a 3rd installment on topic
Introduction
A major US Bank is believed to be losing money and struggling to make certain Silver and Gold obligations in a timely fashion due to physical demand outstripping their own unencumbered vault supply. This observation comes after many months of following abnormal market behavior but was made obvious by the inordinate amount of recent PSLV shorting.
Additionally: on social media there was a post today claiming that Robin Hood restricted Trading in PSLV. We initially reported this as a true assumption. But now we are not so sure about when this rule went into affect. Until we get confirmation that this is something that actually is extremely recent, we’re going to drop that from our calculus. The picture referenced is foot noted here.1
Background:
Recently a noticeable uptick in PSLV shorting was discovered by Semper Vigilante, and noted with interest here See two charts below
Both these behaviors; restricting buyside access at RobinHood and naked shorting (PSLV) have the same effect on physical. They both serve to reduce or stop intake of fresh physical metal into the fund. They tamp, throttle, and redirect demand.
Conclusion: someone is not interested in facilitating the creation of new PSLV shares since new share-creation necessitates new metal to be taken off the market.
This information prompted a Venn diagram creation connecting all physical market aberrations currently in play:
