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CFTC Shows Speculators Slightly Trim Most Metals Positions

This article is more than 10 years old.

By Debbie Carlson

Of Kitco News

(Kitco News) - Speculators got out their scalpels and made only slight cuts to their net-long position in most precious metals futures and options positions on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data released Friday.

For the week ended Aug. 14, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in gold and platinum group metals fall modestly in both the legacy and disaggregated reports. Only in silver did funds add a little to their net-long positions. Speculators increased their bearishness in copper, bumping up their net-short positions.

The most-active December gold contract slipped $10.40 to $1,602.40 an ounce. September silver fell 32.30 cents during the week to $27.763, October platinum fell $11.20 to $1,399.10 and September palladium slipped $9.80 to $578.40. September copper fell 8.15 cents to $3.3590 a pound.

There was “unbelievably muted movements in precious metals positioning as specs truly went on vacation last week, with volumes over the last couple weeks hitting extremely low levels. Prices have moved within a range and thus specs refused to lean more to one side over the other last week,” said analysts at TD Securities.

The positioning in platinum did not reflect the sharp rise in prices seen in that market late last week as the reporting date ended prior to the rally.

HSBC said this trend of subdued action may continue for a bit. “Given the thin summer trading conditions for the precious metals market, we do not anticipate any significant movements in net longs in the near-term,” the bank said.

Managed-money accounts trimmed their net-long position in gold futures and options to 82,056 contracts. Managed-money accounts cut 1,463 gross longs and added 1,991 gross shorts. This is the smallest net-long position the funds have held since late May.

Producers remain net-short in gold, but cut more gross shorts than gross longs, reducing their net position. Swap dealers are also net-short, but increased that position by adding nearly twice as many gross shorts than gross longs.

Non-commercials in the legacy report slightly reduced their net-long position, having cut 610 gross longs and adding 177 gross shorts. They are now net-long 118,223 contracts. Commercials cut their net-short position and reduced exposure overall by cutting more gross shorts than gross longs.

UBS called the action in the legacy report “weak long liquidation.”

Silver net-long positions for the managed-money accounts increased, rising to 10,575 contracts. The rise came from adding 709 gross longs and cutting 543 gross shorts. This is the biggest position funds have held since May. Producers increased their net-short position, having added many more gross shorts than gross longs. Swap dealers lifted their net-long position, having added gross longs and cut gross shorts.

In the legacy report, the silver net-long for non-commercials also increased, but only slightly. They added 651 gross longs and cut 687 gross shorts. They are now net-long 15,703 contracts. As in the disaggregated report, this is the biggest position funds have held since May. Commercials raised their net-short position by adding gross contracts to both sides, with the edge to more gross short positions.

Managed-money accounts in platinum decreased their net-long position. They are now net-long 7,096 contracts, having added more gross shorts than gross longs.  Non-commercials cut their net-long position, which now is 18,980 contracts, having added more gross shorts than gross longs. Commercials lowered their net-short position, having cut more gross shorts than gross longs.

UBS said the decline in the platinum position was mainly due to more aggressive additions to gross shorts compared to longs. “The fact that platinum gross shorts were at an all-time high as of Tuesday last week suggests that short-covering was also a main feature in platinum’s recent rally – we will find out just how much of those short positions were closed out in this Friday’s report,” the bank said.

In palladium, the managed-money accounts slightly cut the net-long position to 2,941 contracts. They added more gross shorts than gross longs to lower the net-long position. In the legacy report, non-commercials modestly cut gross longs and increased gross shorts, lowering their net-long to 4,716 contracts. Commercials reduced exposure on both sides and lowered their net-short.

The copper net-short position for the managed-money accounts rose to 10,755 contracts, as they have trimmed many more gross longs than gross shorts. Funds slightly raised their net-short position in the legacy report, having reduced more gross longs than cut gross shorts. They are net-short 17,781 contracts. Commercials are net-long and reduced that position by adding more gross shorts than longs.

This is the second week in a row that the net-short position for copper rose.

“Money managers thus contributed to the decrease in the price of copper in the period under review. The high pessimism is currently blocking any sharp rise in price, though this will also provide a springboard for sustainably higher prices if sentiment should turn,” said analysts at Commerzbank.

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