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Large Speculators Reduce Gold Net-Long Positions For Fourth Week - CFTC Data

By Debbie Carlson of Kitco News
Monday April 21, 2014 11:42 AM

(Kitco News) - For the fourth straight week, large speculators reduced their net-long gold futures and options positions on the Comex division of the New York Mercantile Exchange in the latest weekly commitments of traders report from the Commodity Futures Trading Commission.

For the week ended April 15, these traders also cut their silver net-long positions in the agency’s disaggregated and legacy data. However, in the platinum group metals, large speculators boosted their net-long positions, and increased their copper net-short positions.

Prices were mixed for precious metals during the timeframe measured by the report. Comex June gold fell $8.80 to $1,300.30 an ounce. May silver slid 56.8 cents to $19.489. June palladium gained $20.05 to $795.90. Nymex July platinum rose $2.90 to $1,444.60. Comex May copper fell 6.35 cents to $2.9875 a pound.

The trend of large speculators reducing bullish exposure to gold continued in the current CFTC report, as managed-money accounts in the disaggregated report cut their net-long position to 90,137 contracts, the lowest level since Feb. 11.

These traders cut 4,766 gross longs and added 3,588 gross shorts, a bearish move. Producers’ net-short positions fell as they added gross longs positions and cut gross shorts. Swap dealers saw their net-short position fall as they cut more shorts than longs.

Non-commercials in the gold legacy report also cut gross longs – 2,616 - and added gross shorts – 4,712. They are now net-long 113,558 contracts; this, too is the smallest net-long position since Feb. 11. Commercials are net-short and reduced that position by adding more gross longs than gross shorts for the second week.

“Gold specs (speculators) shifted to short positions as Russia/Ukrainian tensions were pushed to the backburner, negative Shanghai premiums remain, and technicals look weak—plenty of room for additional shorts to jump back in below the 100-(day moving average),” said TD Securities.

Analysts at Morgan Stanley said speculators’ activity in gold indicates “tepid interest from investors” and this could mean “near-term headwinds remaining substantial for interest in gold to recover.”

Managed-money accounts cut their net-long silver holdings again and did so by adding gross shorts and cutting gross longs. The position stands at 1,645 contracts, which is the lowest net-long position since early February when they were briefly net-short silver. They trimmed 481 gross longs, but added 3,303 gross shorts. Producers sliced their net-short position when they added gross longs and cut gross shorts. Swap dealers built on their newly net-long position as they added gross longs and cut gross shorts.

In the legacy report, non-commercials reversed the modest gain from the previous report and cut their net-long position to 9,270 contracts. Gross longs rose by 192 contracts but gross shorts rose by 3,945 contracts.  Commercials are net-short but reduced that position by adding more gross longs than gross shorts.

“Silver specs added more to the short side, bringing their negative sentiment to near peak levels once again—option-related positioning also suggests further downside expected, along with higher vols (volatility),” TDS said.

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Managed-money accounts in platinum raised their net-long position to 32,903 contracts as they added 261 gross longs and cut 911 shorts. Non-commercials in platinum also boosted their net-long position in the legacy report, to 44,967 contracts, having added 622 gross longs and cut 554 gross shorts.

The rise in the funds’ net-long platinum position came as prices set the high for the week. After the reporting timeframe cut off, platinum prices fell sharply.

A platinum group metals trader said this positioning doesn’t reflect the late Thursday news about an offer from South African miners to the Association of Mineworkers and Construction Union, which caused platinum and palladium prices to fall swiftly. The proposal still needs to be accepted by the AMCU.

Large speculators’ net-long palladium holdings rose following a drop in the previous report’s reading. In the disaggregated report, the managed-money accounts lifted their net-long position to 21,021 contracts by adding 518 gross longs and cutting 582 gross shorts. The palladium legacy report saw non-commercials add 953 gross longs and cut 389 gross shorts, boosting their net-long to 21,021 contracts.

Funds are back to building short positions in copper. In the copper disaggregated report, managed-money accounts are net-short 14,892 contracts. They cut 198 gross longs and added 1,275 gross shorts. In the legacy report, funds are now net-short 21,395 contracts of copper, having cut 2,098 gross longs and added 893 gross shorts.

For further information, see the CFTC’s website.

By Debbie Carlson dcarlson@kitco.com
Follow me on Twitter @dcarlsonkitco



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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