- Speculators continue to hack away at their net-long positions in
gold and silver futures and options on the Comex division of the
New York Mercantile Exchange, which has become a recent trend,
according to U.S. government data.
The data from the Commodity Futures Trading Commission's weekly
commitment of traders report is as of Nov. 2. It does not include
the rapid rise in price for gold and silver last week following the
Federal Reserve's decision to buy $600 billion in Treasury
securities as part of a quantitative easing program.
For futures and options combined, gold saw a rise in both longs
and shorts, but more shorts than longs were added, causing the
net-long overall position to fall for managed-money traders. They
are net-long 204,702 contracts. These traders added 2,896 gross
longs and added 4,151 gross shorts. The producer category saw an
increase in both longs and shorts, and they remain net-short. Swap
dealers are net-short, but cut gross shorts and added to gross
In the legacy report, the gross short position for speculators
picked up significantly, with a rise of 6,034 contracts. They are
still net-long, but that position has been whittled down to 253,538
contracts. Commercial interests added to gross longs and shorts and
Barclays Capital said with the fourth consecutive weekly drop in
the net fund length in Comex gold, fund net-long exposure is at its
lowest level since August, as new shorts were established. "Indeed
short tactical exposure in gold (in the legacy report) is at its
highest level since September 2008 amid financial market turmoil at
52.5k lots (163 metric tons). Non-commercial positions in gold, as
a percentage of open interest, have tumbled to 37%," the bank said
in a research report Monday.
Goldman Sachs said Friday that with the Fed's quantitative
easing announcement and the late rally last week, they expect that
speculative positions likely increased sharply during Thursday's
rally. That could reverse the current trend of funds cutting back
on longs. If so, Goldman forecast that speculative net-length in
gold futures could ultimately rise to 37 million ounces, which
would be a record. They arrive at that estimate by looking at the
yield on the 10-year U.S. Treasury Inflation-Protected Securities.
They said speculative positioning in Comex gold futures can to
reflect the current state of U.S. real interest rates.
Managed-money accounts in silver continue to chip away at their
net-long position, as they are now net-long 34,947 contracts. They
cut gross longs by 1,412 contracts and added 235 gross shorts.
Producers added to both short and long positions, but added more
shorts to increase their net-short position. Swap dealers cut
shorts and added longs, making them only slightly net-short, just
by 843 contracts.
Commerzbank said in a research note Monday that speculators have
cut their net-long positions by 30% since hitting a record level in
In the legacy report, non-commercials cut their net-longs, too,
having cut exposure on both sides. They are now net-long 42,556
contracts, having sheared 1,179 gross longs and 398 gross shorts.
Commercials added to both sides, but are still net-short.
Commerzbank noted even though speculators have trimmed their
net-long positions, prices have not fallen as much, so, the bank
said "the correction potential for these two precious metals is
likely to be limited in our view, even if we do see a further fall
in positions. "
Managed-money accounts continue to add to their record net-long
position in palladium in the disaggregated report. They are now
net-long 15,408 contracts, having added a gross 1,103 long
In the legacy report funds added gross longs and shorts, and
increased their net-long position to 16,707 contracts.
Platinum saw an increase in the net-long position for
managed-money accounts as they slightly added longs to the white
metal. They now stand net-long 24,577 contracts. Speculators
increased their net-long position in the legacy report by 406 gross
longs to stand at 27,655 contracts.
Barclays said the net-fund length in platinum and palladium
grows with this latest CFTC report. "However, it is worth noting
that in both of the PGM markets net-fund length is not at its peak
as a percentage of the total market, with palladium 5 percentage
points shy of its record and platinum 3 percentage points
reflecting the growing size of the total market space," they said.
The bank added that platinum speculative interest is bigger than
the physical exchange-traded fund exposure with platinum holdings
at 1.05 million ounces. Palladium still has more ETF holders, at
1.89 million ounces. "In turn platinum could be more susceptible
than palladium to short-term price corrections," they said.
Copper saw another drop in net-long positions by managed-money
traders, as they cut positions on both sides. They stand net-long
They also cut gross longs by 1,988 contracts and gross shorts by
915 contracts. Producers trimmed from both sides and remain
net-short. Swap dealers modestly cut from longs and added slightly
to short positions, but are net-long still.
Commerzbank said even with the drop in speculative net-longs,
the number of positions they've amassed remains near the all-time
high. "This record level may have already been reached again in the
current reporting period, as the sharp rise in copper prices last
week essentially occurred in the second half of the week and was
therefore not reflected in the data published on Friday. As long as
positions remain high, prices should be well supported," the bank
Non-commercial traders in copper also cut exposure to the red
metal on both sides, making them net-long 25,139 contracts.
Commercials are still net-short and slightly cut gross longs and
For more information on the CFTC's data, go to:
By Debbie Carlson of Kitco News