Trader who made $3 billion on gold bets on silver's fall

Chinese billionaire trader Bian Ximing, who made his name on the record rally of gold, has switched his attention to silver, betting on its collapse. It is valued at nearly $300 million, Bloomberg wrote, citing data from the Shanghai Futures Exchange (SHFE) and information from his sources.

Bian Ximing, through his broker Zhongcai Futures, began actively increasing his bets on the fall of silver in the last week of January, Bloomberg writes, citing information from the SHFE. The exchange does not disclose who exactly is behind the brokerage accounts, but the agency's sources say that the bulk of positions in precious metals are made up of Bian's personal trades and products he directly manages for a limited number of clients.

According to exchange statistics, Zhongcai's short position in silver rose to about 18,000 lots on Jan. 28 and increased to nearly 28,000 lots on Jan. 30, the day silver in Shanghai hit an all-time high. He had to liquidate some positions at a loss because of market volatility. But by Feb. 5, he had built up the largest net short position in silver on the exchange - about 450 tons, or 30,000 contracts. The collapse in metal prices since last week has already earned him about 2 billion yuan ($288 million) in paper profits.

Taking into account past losses, Bian's net profit could be about 1 billion yuan, based on the current position and prices at the end of trading on Tuesday, Bloomberg said. Silver continued to fall on Thursday, losing 17% of its value at one point, which the agency estimates almost certainly further boosted the trader's gains.

Bian Ximing and Zhongcai Futures did not respond to the agency's requests for comment. Bloomberg reconstructed position changes and estimated profits based on SHFE daily data. The exchange does not disclose entry prices of deals, so calculations may slightly differ from the actual ones.

Bian gained notoriety in the Chinese futures market thanks to his aggressive bullish bets on gold, which began almost four years ago, Bloomberg specifies. Since the beginning of 2022, he has earned about $3 billion on them.

Bian's bet on silver comes amid sharp price fluctuations that have the market taking a fresh look at precious metals. Gold is still seen as a protective asset in case of rate changes, central bank purchases and global uncertainty. And the growth of silver is increasingly perceived as a speculative rally associated with industrial demand and traders' bets, rather than sustainable fundamentals, explains Bloomberg.

This article was AI-translated and verified by a human editor