(Kitco News) - Net-long positions in gold, silver and platinum futures and options, held by large speculators at the Comex division of the New York Mercantile Exchange and the Nymex, rose in the latest weekly commitments of traders data from the Commodity Futures Trading Commission, released Monday.
The rise, though, came mostly on the back of short covering, which is the buying back of previously sold positions. There were some new long, or bullish, positions established, but short covering dominated the data, which is as of Dec. 31.
Speculators cut their palladium net-longs, while adding to bullish copper positions.
During the week covered by the report, February gold fell $1 to $1,202.30 an ounce, while March silver slid 11.4 cents to $19.370. April platinum rose by $37.20 to $1,373.80, while March palladium gained $22.85 to $718.30. Comex March copper rallied by 2.25 cents to $3.3965 a pound.
Managed-money accounts increased their gold futures and options net-long position to 34,104 contracts by adding 1,921 gross longs and cutting 3,481 gross shorts. Producers’ net-long position fell as they cut gross long positions and added a few gross shorts. Swap dealers increased their net-short position as they cut more gross longs than gross shorts.
In the gold legacy report, the large speculators took similar action, lifting their net-long position by adding 1,196 gross longs and cutting 2,533 gross shorts. They are now net-long 58,316 contracts. Commercials are net-short. Their position rose, but ultimately exposure fell because they cut more gross longs than gross shorts.
Analysts at TD Securities said they expect more short covering in Friday’s report, considering that prices have rallied since the initial data was released.
HSBC said even though gold speculative short positions fell somewhat versus the previous week, “it remained at uncomfortably high levels. The possibility for further short covering would be positive for gold, in our view.”
Since the reporting window ended, analysts at
Managed-money accounts lifted their net long in silver on a combination of short covering and some new buying, as seen in gold. They are net long 5,573 contracts. They added 1,204 gross longs and cut 2,832 gross shorts. Producers raised their net-short position by adding gross shorts and cutting gross longs. Swap dealers reduced their net-long position by cutting gross longs and adding a few gross shorts.
In the legacy report, the silver net-long for non-commercials rose in similar fashion to the disaggregated report. Funds added 492 gross longs and cut 2,348 gross shorts to lift the net-long to 15,068 contracts. Commercials are net-short and built on that position by adding gross shorts and cutting gross longs.
TDS said silver specs also covered shorts, “as index rebalance buying talk began to heat up during a quiet holiday period.”
BofA Merrill Lynch remains bearish on silver, noting long-term channel resistance on technical charts at $20.81. “Stay bearish for the June lows at $18.22 and below,” they said.
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Managed-money accounts in platinum increased their net-long position to 14,689 contracts, having added 608 gross longs and cut 1,324 gross shorts. Non-commercials in platinum boosted their net-long position to 23,078 contracts, having cut 46 gross longs and 2,173 gross shorts.
In palladium the managed-money accounts reduced their net-long position to 15,660 contracts. They added 76 gross longs and but also added 460 gross shorts, meaning new bearish positions outweighed new bullish ones. Similarly in the legacy report, non-commercials added 570 gross longs and added 741 gross shorts, lowering their net-long to 17,376 contracts.
Speculators added to net-long copper positions in both reports. In the disaggregated report, managed-money accounts are net-long 35,635 contracts when they added 5,339 gross longs and cut 808 gross shorts. Funds are now net-long 10,450 contracts of copper in the legacy report, having added 5,083 gross longs and cut 595 gross shorts. Both of these moves show adding new bullish positions while cutting bearish ones.
“Copper specs continue to shift quite bullishly, adding heftily to longs, as inventories declined globally under expectations of increased demand and supply constraints,” TDS said.
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By Debbie
