Markets

FOCUS: Speculators Mostly Return As Buyers To Metals – CFTC Data

(Kitco News) - Stronger prices lured speculators back to buying most U.S. metals futures and options contracts, as seen in U.S. government data.

In the weekly Commitment of Traders data released by the Commodity Futures Trading Commission late Friday, speculative traders raised their net-long positions nearly across the board in metals markets in both the legacy and disaggregated reports, when looking at futures and options combined. The data is current as of May 31.

Prices on the Comex division of the New York Mercantile Exchange rose during the reporting timeframe. Most-active August Comex gold gained $12.50 an ounce and settled at $1,536.80 on May 31. Comex July silver gained $2.177 an ounce and settled at $38.305. July Nymex platinum settled at $1,834 an ounce, up $78.10; Nymex September palladium settled at $781 an ounce, up $43.90; and July Comex copper rose 16.45 cents a pound to $4.1775.

Gold is drawing safe-haven interest, several market watchers said, as there is a drop in risk appetite amid macro uncertainty.

In the disaggregated report for gold, managed-money accounts increased their net-long position by adding 5,033 gross contracts and cutting 3,246 short contracts. Their net-long rose to 206,794 contracts. In the producer category, both gross longs and shorts were cut, but more longs were eliminated, lifting their net-short position. Swap dealers cut gross longs and added gross shorts, increasing their net-short position.

Non-commercial traders similarly lifted their net-long position in the legacy report by adding 6,038 gross longs and cutting 3,431 gross shorts, which lifted their net-long position to 223,344 contracts. Commercials cut more gross longs than shorts, hiking their net-short tally.

Barclays Capital said the rise in the speculative position comes on a combination of new longs and short covering activity.

The net-long position for managed-money traders in silver rose slightly as they added 759 gross longs and cut 503 shorts, boosting the net-long to 16,488 contracts. Producers added gross longs and cut shorts, lowering their net-short, while swap dealers added gross longs and shorts, lifting their net-short position.

In the legacy report, non-commercial traders cut exposure on both sides of silver, slicing 1,667 gross longs and 1,462 gross shorts, lowering their net-long just slightly, to 24,040 contracts. Commercials added to both sides, but added more gross longs than shorts, dropping their net-short position.

"Investor interest in silver is currently more mixed," Barclays said, noting strong coin demand and sluggish demand for exchange-traded funds. "Meanwhile, speculative interest in Comex silver was mostly unchanged keeping interest at lows last seen over two years ago," they said.

The platinum group metals also saw an increase in managed-money accounts' net-long position as speculators added gross longs and cut shorts. The net-long for managed-money traders in platinum is 19,661 contracts, while it is 10,112 contracts for palladium.

Net-long positions for non-commercial PGM traders also rose as gross longs increased and gross shorts fell. The platinum net-long stands at 23,045 contracts and the palladium net-long is now 10,702 contracts.

Managed-money accounts in copper finally stopped hacking away at their net-long position. These traders added to their net-long position by bumping up gross longs and cutting gross shorts, allowing the net-long position to rise for the first time since April 26.

The net-long now stands at 7,304 contracts. A similar move was seen in the legacy report, with gross longs increased and gross shorts reduced. The net-long position rose to 9,980 contracts, the first rise since April 12.

Barclays said the rise in net-long positions came on the back of fresh buying and short covering."While the net-length is still some way below levels seen late last year/early this year, the first rise since mid-April does suggest and improvement in sentiment," the bank said.

For more a more detailed breakdown, please visit the CFTC website at: http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm

By Debbie Carlson of Kitco News dcarlson@kitco.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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