(Kitco News) - Speculators added to their bullish futures and options positions in U.S. precious and base metals as prices rose in late January, according to U.S. government data released late Friday.

The gains in net long positions were across the board and the buildup was seen in both the legacy and disaggregated weekly commitment of traders reports released by the U.S. Commodity Futures Trading Commission for the week ended Jan. 24.

“Collectively, the data show investors are rebuilding long positions across the precious metals complex. We expect this to continue with a commensurately bullish impact on bullion prices,” said HSBC in a research note.

During the timeframe measured, the most-active April gold futures contract on Comex gained $9 an ounce and settled at $1,667.40 on Jan. 24. Comex March silver rose $1.84 an ounce to settle at $31.975. April Nymex platinum gained $23.70 an ounce to settle at $1,552.40 and March Nymex palladium rose $25.05 an ounce to settle at $680.55. Comex March copper rallied 7.8 cents a pound to $3.8075.

Prices for the metals markets continued to rise for the rest of the week after the reporting window closed.

Managed money accounts raised their net-long position in gold, adding 8,238 gross longs and cutting 1,721 gross shorts, increasing the net-long position to 126,937 contracts. Producers raised their net short position by cutting longs and adding shorts. Swap dealers increased their net-short position by trimming more gross longs than shorts.

Non-commercials in the gold legacy report tacked on 8,088 gross longs and subtracted 931 gross shorts, augmenting the net-long position to 155,027 contracts. Commercials snipped both gross longs and gross shorts, increasing their net-short position because they cut more longs.

It’s possible that the next CFTC report could show even more bullish interest by speculators, said Anne-Laure Tremblay, precious metals strategist at BNP Paribas.

“Looking forward towards next week’s data release, gold could show the strongest increase in the net non commercial futures position. The price was buoyed by the FOMC statement released on Wednesday, in which the Fed stated that it would keep interest rates at ‘exceptionally low levels’ until late 2014. So far, the failure to reach an agreement over Greece’s second bailout package has not dented risk appetite,” Tremblay said.

Speculators increased their net-long position in silver in the disaggregated report. They added 563 gross longs and removed 2,331 gross shorts, lifting the net long to 16,034 contracts. Producers raised their net-short position by cutting some gross longs and adding gross shorts. Swap dealers lowered their net-long position by cutting more gross longs than shorts.

The legacy report saw similar action for silver. The non-commercial traders added 46 gross long contracts and subtracted 2,167 gross shorts, raising the net-long position to 18,878 contracts. Commercials increased their net short by trimming gross longs and adding gross shorts.

Funds lifted their net-long position in the platinum group metals by adding gross longs and whittling down gross shorts. In platinum the net-long position for managed-money accounts rose to 15,093 contracts, while in palladium the net-long position is now up to 5,644.

Non-commercial activity in the legacy data also saw a net-long gain for platinum and palladium, but via different means. In platinum, non-commercial traders cut gross longs and shorts, but axed more shorts, lifting the net long to 22,466 contracts. In palladium, longs were added and shorts were subtracting, pushing up the net-long position 7,579 contracts.

Platinum net longs for both CFTC reports are at their highest level since late September. What’s significant, said Edel Tully, research analyst at UBS, is that “this all suggests that platinum has probably seen the bulk of investor reactions both in terms of short-covering and fresh longs, and the next move will probably be a harder slog.”

Speculators are expanding their net long position for copper for both the disaggregated and the legacy report. In the disaggregated report, managed-money accounts are now net long 7,321 contracts. In the legacy report, the non-commercial trader is net long 4,485 contracts.

Barclays Capital said in a research note that the jump in speculative net long positions suggests that these traders might now be “increasing their long exposure to the complex after a lengthy subdued period.”

For a more detailed breakdown, please visit the CFTC website: http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm

By Debbie Carlson of Kitco News dcarlson@kitco.com

 

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