Speculators Continue To Leave Gold, Return To Other Metals
07 February 2010, 10:54 a.m.
By Debbie Carlson
Of Kitco News
http://www.kitco.com/
(Kitco News) - Gold continues to experience a drop in speculative interest, while the other metals market have seen funds come back to establish bullish positions, according to data from the U.S. government.
In its weekly commitment of traders data released Friday, the Commodity Futures Trading Commission noted in both its disaggregated and legacy futures and options combined reports that speculators continued to reduce their net-long positions in the yellow metal.
The reduction in positions came even as prices rose on the Comex division of the New York Mercantile Exchange for the week ended Feb. 1. April gold settled at $1,340.30 an ounce, up $6.50 during the reporting timeframe. March silver settled at $28.514 an ounce, up $1.709.
Precious metals prices were reignited as the Egyptian crisis generated geopolitical uncertainty and the U.S. dollar weakened, according to Morgan Stanley.
Meanwhile, April platinum settled at $1,833 an ounce, up $45.70, and March palladium gained $38.80 an ounce to settle at $823.55. Copper rose to $4.547 a pound, up 32.1 cents.
Gold saw a hefty chunk of gross longs and shorts exit the futures and options market. Managed-money accounts sliced 10,504 gross longs and 5,634 gross shorts, meaning the net-long position fell to 124,794 contracts, the fifth week in a row of a drop in the net long. This is the smallest net-long position for funds since the disaggregated reports were started by the CFTC in September 2009.
In the same report, producers and swap dealers also exited both gross longs and shorts, shrinking the size of their net-short position.
Non-commercials cut gross longs by 12,328 contracts and shorts by 7,205, reducing their net-long position to 170,706 contracts. Commercial participants cut slightly more short positions than long, modestly reducing their net-short position.
Barclays Capital said the non-commercial positions are now at their lowest level since May 2009, and gross longs are at their lowest since March 2010.
Speculators returned as buyers in silver, with the managed-money sector adding 2,875 gross longs and cutting 2,489 gross shorts. The net-long in the disaggregated report for this group now stands at 23,457 contracts. Producers and swap dealers added to both sides, but added more gross shorts, increasing their net-short position.
The size of the net-long position for funds grew in the legacy report, but they cut both more gross shorts than longs, which allowed the net-long position to rise to 33,162 contracts. Commercials added to both sides, and increased their net-short position.
Barclays Capital attributes the rise in the net-long by non-commercials as short covering, rather than new buys.
Managed-money accounts in platinum metals group returned to adding to their net-long position by adding gross longs and subtracting gross shorts. In platinum, funds net-long stands at 26,678 contracts, just shy of their all-time high position as detailed in the disaggregated report. For palladium, the net-long fund position is at 13,492 contracts.
In the legacy report, funds added to gross longs and cut gross shorts in both PGMs. The fund net-long for platinum now stands at 30,562 contracts, while the fund net-long for palladium rose to 15,260 contracts.
Anne-Laure Tremblay, precious-metals strategist BNP Paribas, said investor interest in platinum has rebounded notably since the end of 2010 and they are driving prices in the white metal. While the overall picture for platinum is improving, the physical market is not sufficiently tight to underpin a sustained price rally in our opinion. It is investment demand so far which is largely responsible for the better performance of the metal since the beginning of 2011, she said.
The net-long position for managed-money traders in copper rose to 32,040 contracts as they added gross longs and cut a modest number of gross shorts. In the legacy report, non-commercials added to both gross longs and shorts, but saw more new longs created, lifting the net-long to 24,711 contracts. Commercials added to both sides and increased net-shorts.
