(Kitco News) - Large speculators returned as sellers of precious metals futures and options on the Comex division of the New York Mercantile Exchange and the Nymex, trimming back exposure in all precious metals and slashing gold positions, according to U.S. government data.
For the week ended April 23, large speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in precious metals fall across the board, with the gold net-long position in disaggregated reports fall to its lowest level since mid-March. For the legacy report, the gold net-long is the smallest since early November 2008. Reductions in silver and the platinum group metals were less severe, but still saw a reduction. In copper, speculators reduced their net-short position.
Prices for the metals were mostly lower during the week to April 23, which is the timeframe covered by the report. June Comex gold was the only metal to buck the trend as it rose $21.40 to $1,408.80 an ounce as of April 23. May silver dropped 81.10 cents to $22.817. Nymex July platinum fell $32.80 to $1,417.80, while June palladium dropped $4.85 to $673.35. Comex May copper slid 21.25 cents to $3.0930 a pound.
Managed-money accounts in the disaggregated report slashed their exposure to gold futures and options, cutting their net-long position to 46,168 contracts, the lowest since March 12. Managed-money accounts cut 5,427 gross longs and added 9,984 gross shorts, meaning they sold bullish positions and added bearish ones. Producers and swap dealers lowered their net-short position as they added gross longs and heavily cut gross shorts.
The action by non-commercials in the legacy report was more pronounced. Large speculators decreased their net-long position, having cut 10,100 gross longs and added 12,287 gross shorts. They are now net-long 83,691 contracts, the lowest since Nov. 18, 2008. Commercials are net-short, but also slashed that position by cutting many gross shorts and adding gross longs.
In addition to the smallest net-long position since late 2008, HSBC said, “gold speculative short positions are back to levels not seen since July 1999… A possible covering of short positions may lead to a rally in gold prices, in our view.”
Barclays also noted the size of the short position in gold, and has a similar view as HSBC. “Tactical investors are yet to turn favorable towards gold, but the data suggests that prices may find support from a short-covering rally,” they said.
The silver net-long position for the managed-money accounts decreased to 5,689 contracts. The fall came from cutting 708 gross longs and adding 1,296 gross shorts, similar to the action in gold. Producers lowered their net-short position, having added more gross longs than shorts. Swap dealers added to their net-long position by adding gross longs and cutting gross shorts.
In the legacy report, the silver net-long for non-commercials also decreased. They cut 1,615 gross longs and added 1,956 gross shorts. They are now net-long 12,593 contracts. Commercials are net-short, but saw a swift drop in that position as they added nearly three times as many gross longs as gross shorts.
Managed-money accounts in platinum decreased their net-long position to 19,183 contracts, having added 297 gross longs and 1,119 gross shorts. Non-commercials in platinum also decreased their net-long position, which now is 27,735 contracts, having added 592 gross longs and 909 gross shorts.
TD Securities noted while speculators added some gross longs, they also increased their short holdings “amid directional uncertainty following the recent sharp decline and demand concerns.”
In palladium the managed-money accounts cut their net-long position to 17,082 contracts. They cut 272 gross longs and added 482 gross shorts. In the legacy report, non-commercials cut 355 gross longs and added 268 gross shorts, lowering their net-long to 18,583 contracts.
The copper net-short position for the managed-money accounts fell to 15,727 contracts, as they added 4,204 gross longs and cut 7,481 gross shorts. Funds lowered their net-short position in the legacy report, having cut 1,659 gross longs and 4,496 gross shorts. They are net-short 20,670 contracts.
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
