(Kitco News) - Speculators are slowly adding bullish precious metals trades back to their net holdings as these market participants increased their net-long positions on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data.
For the week ended Jan. 22, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in precious metals rise in both the legacy and disaggregated reports. Speculators in copper, though, were split between the two reports.
Prices were higher during the timeframe measured. In the week to Jan. 22, Comex February gold rose $9.30 to $1,693.20 an ounce, while March silver gained 64.80 cents to $32.177 an ounce. Nymex April platinum rallied $8.60 to $1,698.50 an ounce during the week, and March palladium rose $16.55 to $729.90. March copper gained 6.75 cents to $3.7050 a pound.
While prices for gold and silver were up during the timeframe covered, values for the two precious metals fell sharply afterward and remain weak on Monday, which could mean the growth seen in the net-long positions ended.
Managed-money accounts in the disaggregated report added to gold futures and options for the second week in a row, increasing their net-long position to 107,496 contracts. Managed-money accounts added 4,405 gross longs and subtracted 3,632 gross shorts. Producers lifted their net-short position as they added more than twice as many gross shorts than gross longs. Swap dealers are net short and increased that position by cutting gross longs and bumping up gross shorts.
Non-commercials in the legacy report also increased their net-long position, having added 2,924 gross longs and sliced 5,041 gross shorts. They are now net-long 159,182 contracts. Commercials are net-short, having added to gross shorts and trimmed gross longs.
Joni Teves, precious metals analyst at UBS, said don’t read too much into this report’s data for gold. “Much of this move has likely been reversed in the selloff late last week, and we’ll get a confirmation of this scaling back in gold positioning in the report due this Friday,” Teves said.
Silver net-long positions for the managed-money accounts increased for the second week in a row, rising to 26,336 contracts. The rise came from adding 3,794 gross longs and cutting 145 gross shorts. Producers and swap dealers are both net short, as each cut gross longs and added to gross shorts.
In the legacy report, the silver net-long for non-commercials also increased. They added 2,746 gross longs and cut 121 gross shorts. They are now net-long 33,950 contracts. Commercials are net-short and added gross shorts while cutting gross longs.
Teves is more impressed by silver. The UBS analyst noted that the jump in silver speculative positions were the largest weekly addition since October. Further, silver net-long positions are at only 52% of the high, and “in terms of positioning, silver is the most attractive precious metal at the moment,” Teves said.
Managed-money accounts in platinum continued their shopping spree and boosted their net-long position. They are now net-long 38,097 contracts, having hiked gross longs and added only a few gross shorts. This is the largest net-long position for these types of accounts since the disaggregated report started in for the PGMs in March 2010.
Non-commercials in platinum boosted their net-long position, which now is 46,513 contracts, having added a large number of gross longs and only a few gross shorts. This is the largest net-long position for platinum speculators in the legacy report since 2006. Commercials are net-short. They increased that position, but did so by cutting more gross longs than gross shorts.
In palladium the managed-money accounts increased their net-long position to 18,972 contracts. They added a large number of gross longs and cut a handful of gross shorts to raise the net-long position. As it was for platinum, this is the largest net-long position for these types of accounts since the disaggregated report started in for the PGMs in March 2010.
In the legacy report, non-commercials added a significant number of gross longs and only a couple of gross shorts, raising their net-long to 20,877 contracts. Again, as in platinum, this is the biggest net-long position for palladium speculators in the legacy report since 2006. Commercials added cut gross longs and added heavily to gross shorts, raising their net-short position.
HSBC said given the size of the net-long position for palladium, it “may run the risk of a pullback.”
Activity by the speculative traders was mixed in the two reports. In the disaggregated report, the copper net-long position for the managed-money accounts rose by a little less than 300 contracts, to 16,438, as they cut more gross shorts than gross longs. Funds trimmed their net-long position in the legacy report, having added many more gross shorts than gross longs. They are net-long 9,516 contracts.
Commerzbank said the disaggregated data for copper shows that money managers are still cautious about the red metal’s stamina. “If financial investors should start betting increasingly on rising prices again here too, copper should be given new buoyancy,” they said.
For further information, see the CFTC’s website: http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm
By Debbie Carlson of Kitco News dcarlson@kitco.com
