Chinese trader who made $3 billion in gold is betting big on silver

Bian Ximing, who shuns the spotlight and spends most of his time in Gibraltar, has made nearly $3 billion in bullish bets on gold contracts on the Shanghai Futures Exchange since early 2022. He has now built the exchange’s largest short position in silver, according to a Bloomberg analysis of exchange data and people familiar with his investments. They requested that their names not be revealed because the information is not public.

Bian’s big sell-off comes with significant risks, and he has been forced to liquidate some positions at a loss in a volatile silver market. But he now holds a short position of about 450 tons of silver, or 30,000 contracts – so the metal’s sharp decline since last week has led to paper gains of about 2 billion yuan ($288 million).

Including previous losses, Bayan is expected to post net profits of about 1 billion yuan, based on its position and prices at the end of Tuesday. Silver again sliding In Thursday trading it was down more than 16% – which almost certainly boosted statement returns significantly.

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Bayan, through brokerage Zhongcai Futures Co., began increasing silver long positions in the last week of January, according to exchange data. SHFE does not provide details on the identity of the individual investors behind the brokerage accounts, but the people said Bayan’s own bets — and the products it runs directly for a small number of clients — make up the bulk of the company’s precious metals positions.

Bian and Zhongcai Futures did not respond to emails seeking comment.

Zhongcai’s short silver position rose to around 18,000 contracts on January 28, exchange data showed. It rose further to around 28,000 contracts on January 30, when the metal in Shanghai reached an all-time high.

China Big Short

Bayan’s bet comes as weeks of wild price fluctuations have begun to cause market watchers to rethink their single-minded approach to precious metals. While many institutional investors continue to view gold as a hedge against interest rate shifts, central bank purchases and global uncertainty, the silver rally is increasingly viewed as an artificial rally driven largely by speculative positions – rather than economic and other fundamental factors.

Read more: Trader who made $1.5 billion in gold is building a giant bet on copper

Bian gained notoriety in China’s futures markets for his aggressive bullish bets on gold that began nearly four years ago. He is one of the few larger-than-life figures who have dominated commodities trading since the economic boom began more than two decades ago. Unlike many of his peers, he rose to prominence for his isolation — and for the loyal following of his musings on investing philosophy that he acquired online.

Since August last year, he has built a long position in silver that has generated profits of more than 1.3 billion yuan, according to calculations based on exchange data.

However, in November, he began to change his stance, trying to reach the top of the rally with temporary moves that sometimes left him on the losing side of trades. However, since last week, Bayan has held his short position with conviction, spreading his exposure across longer-dated contracts and maintaining it during bullish price swings.

The current sharp sell-off has rewarded his strategy.

Bloomberg used daily data from SHFE to reconstruct changes in Zhongcai’s positions and to estimate earnings. However, the exchange does not disclose details such as position costs, which means there may be small differences.

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