Comment Text:
Dear Chairman Gensler and fellow Commissioners:
From time to time I purchase and trade both gold and silver, and therefore have an interest in the activities of both the LBM and COMEX. My concern is that both exchanges can be somewhat opaque at times in the way data is presented with respect to market concentration. As an occasional trader it is difficult to ignore the now generally held belief that a couple of large positions are held by a small number of financial institutions. At the moment this is believed to more on the short side, but at other times it has the potential to switch to long. Positions which are too concentrated on the long side are likely to prejudice the interests of thousands of genuine smaller investors and industrial users, while those on the short side encourage mis-pricing and the waste of silver. With an estimated 7 - 20 years of silver left in the ground, (New Scientist/USGS) I don't think the next generation will thank us for exhausting silver supplies via a distorted pricing mechanism.
I'm aware of Mr Butler's suggestion that a 1500 contract limit would be more appropriate. My own sense is that we need to be more robust in supporting a free market price discovery mechanism by being even more aggressive. To remove any suggestion that a tiny number of organisations might be able to excessively influence price, and as a conservation duty to the next generation I suggest that a position limit of 1200 contracts in silver be imposed.
Thank you for allowing non-U.S. citizens the opportunity for comment.
