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FOCUS: Speculators Cut Bullish Gold, Silver Positions -- CFTC

This article is more than 10 years old.

(Kitco News) - Large speculators cut bullish positions in U.S. gold futures and options, according to the most recent data released by the Commodity Futures Trading Commission, reversing some of buys they registered in the previous report.

Silver also saw speculators cut their bullish positions, with these traders very close to being neutral on the metal in the CFTC’s disaggregated version of the weekly commitment of traders report.

For the week ended March 26, large speculators added to their already-sizable net-short position in copper in both the disaggregated and legacy versions of the two reports, while the activity was mixed for the platinum group metals. The data covers precious and base metals futures and options on the Comex division of the New York Mercantile Exchange and the Nymex.

Prices for the metals were mixed during the week to March 26, which is the timeframe covered by the report. June Comex gold fell $16 to $1,597.30 an ounce as of March 26. May silver fell 16.40 cents to $28.679. Nymex July platinum gained $10.30 to $1,569.80, while June palladium rose $26.20 to $761.40. Comex May copper rose 3.7 cents to $3.4425 a pound.

Speculators pulled back on their net-long position in gold in both reports, but did not completely erase the bullish positions put on in the previous week’s report. Managed-money accounts in the disaggregated report trimmed their net-long gold futures and options positions to 60,126 contracts. Managed-money accounts cut 10,539 gross longs and subtracted 472 gross shorts. Producers lowered their net-short position as they cut more gross shorts than gross longs. Swap dealers increased their net-short position, but did so by cutting more gross longs than gross shorts.

Non-commercials in the legacy report also decreased their net-long position, but the drop was subtle. They cut exposure overall, but did so by cutting 4,191 gross longs and slicing 3,927 gross shorts, which made the net change modest. They are now net-long 127,732 contracts, a drop of 264 contracts from the previous week. Commercials are net-short, but the position was little changed as these traders cut a near equal number of gross shorts and gross longs.

TD Securities said gold saw outflows based on record U.S. equity valuations, which prompted “specs to trim their long gold positions, while low yields and U.S. growth concerns persuade shorts to cover.”

Barclays said the action in gold was a mix of long liquidation and short covering, which caused “tactical investors (to scale) back exposure to Comex gold... Gross shorts have now fallen to six-week lows while gross longs continue to hover around the 200,000-lots mark, a level positioning has fluctuated around since last August ahead of the QE3 announcement.”

Silver net-long positions for the managed-money accounts decreased, falling to a mere 632 contracts. The fall came from cutting 875 gross longs and adding 1,266 gross shorts, as selling overwhelmed buying. Producers lowered their net-short position, having cut more gross shorts than gross longs. Swap dealers added to their net-long position by adding gross longs and gross shorts.

In the legacy report, the silver net-long for non-commercials also decreased, but not as severely in the disaggregated report. They cut 966 gross longs and added 2,190 gross shorts. They are now net-long 9,870 contracts. Commercials are net-short, but cut that position by chopping more gross shorts than longs.

In the current CFTC report data, activity in the PGMs was mixed. Managed-money accounts in platinum slightly decreased their net-long position. They are now net-long 24,375 contracts, having added 1,043 gross longs and 1,247 gross shorts.

In the legacy report, however, non-commercials in platinum increased their net-long position, which now is 35,861 contracts, having added 1,559 gross longs and 1,143 gross shorts. Commercials are net-short but decreased that position, having cut more gross shorts than gross longs.

“Despite weaker auto sales in Europe, platinum remains stuck at the 200(-day moving average); uncertain specs added both longs & shorts,” TDS said.

In palladium the managed-money accounts increased their net-long position to 24,104 contracts. They added 304 gross longs while also adding 174 gross shorts. In the legacy report, non-commercials added 299 gross longs and 125 gross shorts, raising their net-long to 26,760 contracts. Commercials added slightly more gross longs than gross shorts, lowering their net-short position.

The copper net-short position for the managed-money accounts rose to a new record of 30,036 contracts, surpassing last week’s record level, as they added 4,937 gross shorts and added 620 gross longs. The data for this report goes back to the inception of this reporting format, which is September 2009. Funds raised their net-short position in the legacy report, having added 5,943 gross shorts and 1,942 gross longs. They are net-short 20,311 contracts, the largest short position in the legacy report since July 2009. Commercials reduced their net-short position by adding to gross longs and cutting gross shorts.

TDS said although there was some new longs established, the new short positions offset any new buying. “Wavering China demand and highs in inventories are dragging on the red metal,” they said.

For further information, see the CFTC’s website: http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm

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By Debbie Carlson of Kitco News dcarlson@kitco.com