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Speculators Cut Their Net-Long Positions In Gold, Platinum Group Metals - CFTC Data

By Debbie Carlson of Kitco News
Monday December 23, 2013 12:45 PM

(Kitco News) - It was a short-lived build in large speculators’ net-long positions in gold and platinum group metals futures and options holdings on the Comex division of the New York Mercantile Exchange and the Nymex, as these traders cut back on those bullish positions in the latest weekly commitments of traders data from the Commodity Futures Trading Commission, released Friday.

For the week ended Dec. 17, speculators’ net-long position in silver rose, but mostly on the back of short covering. However, the large speculators turned net-long copper for the first time in a while.

Metals prices mostly fell during the week covered by the report. February Comex gold fell $31 an ounce to $1,230.10 as of Dec. 17. March silver dropped 47.50 cents to $19.84. Nymex January platinum slid $44.10 to $1,344.60. March palladium fell $37.40 to $701.05. Comex March copper bucked the trend, rising 5.50 cents to $3.3215 a pound.

Managed-money accounts activity in gold futures and options was subdued, with the net-long gold position falling slightly, to 32,524 contracts. Managed-money accounts cut 38 gross longs and added 886 gross shorts.

Producers’ net-long position rose a bit as they added more gross long positions than gross shorts. Swap dealers reduced their net-short position as they added more gross longs than gross shorts.

In the gold legacy report, the large speculators were more active, reducing their net-long position by cutting 713 gross longs and adding 1,662 gross shorts. They are now net-long 54,526 contracts. Commercials are net-short, but trimmed that position by adding more gross longs than gross shorts.

“Gold specs (speculators) took a little caution ahead of the FOMC (Federal Open Market Committee) meeting on Wednesday, with good U.S. economic data pushing specs to add a little positioning onto the short side,” said TD Securities.

Capital Trading Group said the report likely overstates the speculative long position since after the reporting window closed, the February gold futures contract dropped another $27. “While the … report was overstated, the magnitude of the spec long positioning is larger than what we expected it to be and that alone increases the prospect of another downward extension,” they said.

Managed-money accounts returned to being net long in silver, after the previous report’s trip to net-short territory. They are net long 1,921 contracts. They added 674 gross longs and cut 1,969 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, but because short covering more than offset long liquidation. Funds cut 1,021 gross longs and 2,130 gross shorts to lift the net-long to 12,155 contracts.

Commercials are net-short and built on that position by adding more gross shorts than gross longs.

Managed-money accounts in platinum cut their net-long position to 14,206 contracts, having cut 780 gross longs and added 1,286 gross shorts. Non-commercials in platinum decreased their net-long position to 23,401 contracts, having added 862 gross longs and 1,116 gross shorts.

“Platinum prices also fell, dragged down by gold, with specs adding to the short side; however, with prices at much lower levels than palladium, long specs also took a small punt,” TDS said.

In palladium the managed-money accounts reduced their net-long position to 18,428 contracts. They cut 1,396 gross longs and 876 gross shorts. Similarly in the legacy report, non-commercials cut 1,229 gross longs and added 932 gross shorts, lowering their net-long to 20,007 contracts on short covering.

Speculators turned net-long copper in both reports. In the disaggregated report, managed-money accounts are now net-long copper for the first time since Nov. 5. They turned net-long 20,688 contracts when they added 9,146 gross longs and cut 12,766 gross shorts. Funds are now net-long 2,335 contracts of copper in the legacy report, having added 10,605 gross longs and cut 4,923 gross shorts. This is the first time since Oct. 22 they are net long.

For further information, see the CFTC’s website.

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By Debbie Carlson dcarlson@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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