Large Speculators Trim Gold Net-Long Positions - CFTC Data

April 14, 2014

New York (Apr 14)  Large speculators continue to reduce net-long gold futures and options positions on the Comex division of the New York Mercantile Exchange, making the current data in the latest weekly commitments of traders from the Commodity Futures Trading Commission the third straight week of losses.

For the week ended April 8, these traders saw mixed activity in their net-long positions in silver between the agency’s disaggregated and legacy data. Large speculators’ activity in the platinum group metals was also mixed, while these traders reduced their copper net-short positions for the second week.

Comex June gold rose by $29.10 to $1,309.10 an ounce during the week covered by the latest CFTC report. May silver gained 36.9 cents to $20.057. June palladium fell by $6.10 to $775.85.  Nymex July platinum rose by $12.10 to $1,441.70. Comex May copper gained 1.65 cents to $3.0510 a pound.

Not only did managed-money accounts in the disaggregated report reduce their net-long gold positioning, but for the second week they cut it by slicing longs and adding shorts, a bearish combination. Their net-long sits at 98,492 contracts, the lowest level since Feb. 18.

These traders cut 6,395 gross longs and added 1,469 gross shorts. Producers’ net-short positions rose as they cut gross longs positions and added gross shorts. Swap dealers saw their net-short position fall as they cut shorts and added longs.

Non-commercials repeated this activity in the gold legacy report as they cut 5,694 gross longs and added 541 gross shorts. They are now net-long 120,885 contracts, the smallest since Feb. 18. Commercials are net-short and reduced that position by adding more gross longs than gross shorts.

Analysts at Standard Chartered noted the bearishness of the fund activity in gold.

“Though outflows were smaller than the previous week, they were still significant… However, prices rose 1.1%, bouncing from the lows of April 1. We expect the renewed upward momentum to ease, although geopolitical events are likely to curb downside momentum and prevent a sudden collapse in prices,” they said.

Analysts at Citi said considering the reduction in fund positioning while gold prices are up in early April, it suggests that the rally in the early part of the month was not from speculative activity.

“However, with the release of FOMC (Federal Open Market Committee) minutes on April 9th suggesting that the U.S. economy might continue to require monetary stimulus for some time, plus a re-escalation of Ukraine-Russia tensions, we expect a reversal of the downtrend in net-long positions over the next week,” Citi analysts said.

Managed-money accounts saw only a slight reduction in their net-long silver holdings, with the position falling to 5,429 contracts, which remains the lowest position since early February when they were briefly net-short silver. They added 140 gross longs, but added 293 gross shorts. Producers raised their net-short position when they added more gross shorts than gross longs. Swap dealers turned modestly net-long as they added gross longs and cut gross shorts.

In the legacy report, the silver net-long for non-commercials rose to 13,023 contracts as they added new bullish positions and cut bearish ones. Gross longs rose by 942 contracts and gross shorts fell by 961 contracts.  Commercials are net-short, and hiked that position by adding more gross shorts than gross longs.

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