(Kitco News) - As gold prices rose, speculators sought out to buy the yellow metal on the Comex division of the New York Mercantile Exchange, according to U.S. government data.

For the week ended Aug. 2, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in gold rise significantly in both the legacy and disaggregated reports.

Prices for December Comex gold futures during the reporting time frame – July 27 to Aug. 2 – rose $25.260 an ounce, settling at $1,644.60 on Aug. 2.

Prices for the rest of the precious metals complex and for copper fell during the timeframe, but since the reporting window closed, prices for these metals have dropped even more in light of slowing economic growth and investors’ disdain of “riskier” assets. Prices for Comex September silver fell 60.6 cents an ounce during the timeframe, settling at $40.092 on Aug. 2 Nymex October platinum fell $13.70 an ounce to $1,793.50 and Nymex palladium slipped $9.20 an ounce to $826.90. Comex September copper dropped 8.3 cents a pound to $4.3950.

Managed-money accounts piled in gold futures and options, increasing their net-long position to 253,653 contracts. Managed-money accounts added 21,755 gross longs and added 1,358 gross shorts. Producers remain net-short, but added slight more gross longs than gross shorts. Swap dealers are also net-short, having cut gross longs and bumped up gross shorts.

Citigroup said the net-long position for the managed-money accounts is a record. The bank also pointed out that open interest for futures and options combined is up 18% from a year ago. For the time being the rises in the net-long position and open interest together are supportive for gold. However, the bank said the significant year-on-year growth in total open interest and the record long position held by the money-managers suggest that the market is overbought and vulnerable to a price break and long liquidation. “We’d ride long positions, but be prepared to reverse to short on breaks to the downside,” they said.

Non-commercials in the legacy report also sharply increased their net-long position, having added 19,610 gross longs and trimmed 152 gross shorts. They are now net-long 289,250 contracts. Commercials are net-short, having added heavily to gross shorts and raised gross longs.

Barclays Capital said the non-commercial position for gold is the highest since October 2010. Commerzbank has also noted the rise in the net-long position for the funds, but said as long as the news flow continues to encourage safe-haven investing, the high speculative positions in gold shouldn’t be an issue.

Silver net-long positions for the managed-money accounts increased, rising to 28,119 contracts. The rise came from adding 1,244 gross longs and adding 617 gross shorts. Producers are net-short, having cut gross longs and added to gross shorts. Swap dealers are net-short and cut from both sides.

In the legacy report, the silver net-long for non-commercials also increased, but only slightly. They added a few gross longs and cut a modest number of gross shorts. They are now net-long 32,577 contracts. Commercials are net-short and added gross positions to both sides.

Managed-money accounts in platinum increased their net-long position. They are now net-long 19,604 contracts, having added gross longs and cut gross shorts.  Non-commercials built on the rise in their net-long position, which now is 23,349 contracts, having added gross longs and cut gross shorts. Commercials are net-short, having cut gross longs and added to gross shorts.

In palladium the managed-money accounts slightly cut the net-long position to 14,964 contracts. They cut a handful more gross longs than gross shorts to lower the net-long position. In the legacy report, non-commercials increased gross longs and decreased gross shorts, raising their net-long to 17,277 contracts. Commercials added exposure on both sides and remain net-short.

The copper net-long position for the managed-money accounts slipped to 27,345 contracts, as they have trimmed gross longs and hiked gross shorts. Funds chopped their net-longs in the legacy report, having reduced more gross longs than cut gross shorts. They are net-long 24,266 contracts. Commercials are net-short and added to both sides.

Commerzbank attributes the decline in net-long positions to profit-taking,  and said given that prices have skidded since the reporting date of Aug. 2, “further positions have been squared since.”

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

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