FOCUS:Speculators Return As Buyers In Gold -CFTC

(Kitco News) - Speculative traders returned as gold buyers in U.S. futures and options, according to U.S. government data released late Friday.

In both the disaggregated and legacy weekly commitment of traders reports issued by the Commodity Futures Trading Commission, the managed-money and larger trader speculative non-commercial accounts increased their net-long positions in the yellow metal, following several weeks of a decrease. The data is for the trade date ended Sept. 6 and encompasses both the futures and options activity combined at the Comex division of the New York Mercantile Exchange.

A rise in prices for gold may have encouraged funds to add to net-long contracts. During the timeframe measured, most-active December gold futures contract on Comex rose $43.50 an ounce and settled at $1,873.30 on Sept. 6. Comex December silver gained 40.4 cents an ounce to settle at $41.868. October Nymex platinum rose $5.10 an ounce to settle at $1,858.20 and December Nymex palladium fell $29.75 an ounce to $749.55. Comex December copper rose 8.55 cents a pound to $4.0560.

Managed-money accounts returned to adding to their net long gold position, reversing August's action. Their net-long position now stands at 197,844. They added 1,377 gross longs and cut 1,095 gross shorts. CFTC data show these speculative accounts are nearly completely long, as the total gross short position is 4,980 contracts.

Despite this heavy gross long position, analysts at Barclays Capital said it is not worrisome. "Non-commercial positions as a percentage of open interest remained unchanged at 35%, implying the market is not over extended," they said.

The producer category showed these market participants added to positions in gold on both sides, adding a significant number of gross shorts, which lifted its net short position. Swap dealers also added to both sides, but posted more longs than shorts, decreasing their net-short position.

In the legacy report, large speculators, known as non-commercials, increased gross longs by 9,349 contracts and raised gross shorts by 481 contracts, pushing up their net-long position to 241,504 contracts. Commercial traders increased gross longs and shorts, but added more shorts, leaving them with a bigger net-short position.

Managed-money accounts added to longs and cut shorts in silver, increasing their net-long for silver to 28,256. They raised gross longs by 1,125 contracts and cut gross shorts by 700 contracts.

In silver, producers andswap dealers both cut longs and added shorts, raising their respective net-short positions.

The speculator category in the legacy report showed an increase in gross longs of 314 contracts and a cut in gross shorts of 643 contracts, meaning the net-long for silver rose to 34,535 contracts. This category shows that the non-commercial trader is nearly completely long in the white metal, with total gross shorts at 3,324 contracts.

In the legacy report, commercials added to net-short positions in silver, having cut gross longs and increased gross shorts.

Activity by speculators was mixed in the platinum group metals. Both metals saw a rise in their net-long positions, but the method to reach that result was different. In the disaggregated report, managed-money accounts are now net-long 22,540 contracts in platinum, as they added more gross longs than shorts. In palladium, managed-money accounts whittled away both gross longs and shorts, but cut more shorts than longs, lifting the net-long to 10,874 contracts.

After easing last week, net fund length across the PGMs also rose as fresh long positions were established with Nymex platinum closing in on its highest-ever levels, Barclays Capital said.

In the legacy report for platinum, non-commercials cut short contracts and added to long contracts, raising the net-long position for funds to 28,544. Commercials remain net-short, having cut gross longs and added to gross shorts. Palladium speculators in the legacy report hiked gross longs and cut gross shorts and are now net-long 12,613 contracts.

Commercials are still net-short, also having cut gross longs and added to gross shorts.

Managed-money accounts returned to being net long in copper after spending two weeks net short the metal. Funds increased gross longs and cut gross shorts, putting their net long position at 3,221 contracts. Speculators in the legacy report boosted their net long position by buying up more gross longs than shorts, hiking their net-long position to 3,518 contracts.

Commerzbank said given that this is the first time in three weeks to see speculators returning to have a net long position in the disaggregated report it, "is probably only a momentary view, though, in the current volatile market climate."

For further information, see the CFTC website at:

By Debbie Carlson of Kitco News;

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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