(Kitco News) - Speculators have returned to buying gold futures and options, and mostly have added to long positions across the precious metals complex, according to the U.S. Commodity Futures Trading Commission, the government oversight agency.
In its weekly commitment of traders data released Friday for the week ended Sept. 28, the CFTC said managed-money accounts in the disaggregated report returned to add long positions to gold futures and options. For the Comex division of the New York Mercantile Exchange, managed-money accounts added a gross 10,018 long contracts and a gross 925 short contracts. They are now net-long 232,220 contracts, the most since Nov. 3, 2009. Swap dealers and the producer/merchant categories show those traders remain net-short, but added to both long and short positions.
In the CFTC's legacy report, speculators also added to gold positions, futures and options combined. Non-commercials are net-long 280,380 contracts, having added 11,391 gross longs and 3,297 gross shorts. Commercials remain net short.
The jump in fresh net-longs came after speculators had trimmed back net-long positions in the previous disaggregated report for the first time in several weeks. Some market watchers wondered if this was a sign of further profit-taking, while others suggested it was the result of positioning ahead of the Federal Open Market Committee meeting.
The return of speculators in the disaggregated reports and the continued growth in the legacy reports came as gold set record nominal prices. From Sept. 22 to Sept. 28, the time period covered by the report, gold prices rose $16.20 an ounce, settling on Sept. 28 at $1,308.30. By Friday of that week it settled at $1,317.80.
Barclays Capital said as gold reached record price highs, it is also set record open interest levels. Regarding the legacy reports, it said that the non-commercial positions as a percentage of the market is only at 42%, versus an all-time high of 51%. This reflects "widening interest in gold but many market participants have preferred to hold physical exposure," the bank said Monday.
Commerzbank also noted the speculative interest in gold in the CFTC report, but countered it with the outflows from exchange-traded funds. "Gold's latest rally is not being accompanied by inflows into ETFs. On the contrary, several investors are taking profits. The world's largest gold ETF, SPDR Gold Trust, reports outflows of almost 2.5 tons. On the other hand, short-term oriented financial investors appear to be very optimistic, though, and are increasingly betting on rising prices," the bank said Monday.
Silver also saw a bump in new long positions in the CFTC report. In the disaggregated report managed-money firms are net-long 48,686 contracts, adding to their record net-long position in this report. Managed-money firms added gross long 3,456 contracts and 1,765 gross shorts. Producer and swap dealer categories show those traders are still net-short, but they also slightly cut shorts and modestly added to longs.
In the legacy report, non-commercials are net-long 52,839 contracts, adding slightly to their position, the highest since Oct. 20, 2009.
Like gold, silver saw prices rise to steep levels, enticing new buyers as new longs offset new shorts. During the reporting timeframe, silver prices rose 65.2 cents an ounce, settling on Sept. 28 at $21.707. On Friday of that week it settled at $22.060.
Commerzbank noted the rally in silver is getting support from new longs coming in on the speculative side, but it also offers this warning: "the significant positioning of financial investors also carries the risk of substantial price corrections should any major profit-taking begin. The correction potential is thus growing."
The managed-money net-long platinum positions were essentially flat on the week, down one contract to 20,800 contracts. They added to the palladium longs and are now net-long 13,927 contracts. In the legacy report non-commercials increased their net-long platinum position slightly and stand 23,230 contracts net-long. The palladium non-commercial net-longs are now 15,870 contracts, up from the prior week.
Thoughts of a growing global economy attractive speculators to copper, with the net-long position for managed-money up from the week before. They are now net long 29,167 contract, the most since Jan 26, 2009. In the legacy report, non-commercials are net-long 22,160 contracts, the most since April 13.
For a detailed breakdown of the CFTC report, please visit: http://www.cftc.gov/dea/options/other_sof.htm