Large Speculators Trim Comex Gold Net Length, But Add To Silver Net Long - CFTC Data

(Kitco News): Large speculators trimmed their net length in gold but added to their net-long position in silver, according to the most recent weekly report on positioning of market participants from the Commodity Futures Trading Commission.

These accounts also slightly trimmed their bullish positioning in platinum group metals but added to it in the one base metal included in the report, copper.

All of the metals eased during time period covered by the report, which was for the week through July 15. Comex August gold fell $19.40 during the reporting week to $1,297.10 an ounce as of July 15; September silver slipped 12.4 cents to $20.889. Nymex October platinum fell $11.50 to $1,485, while palladium slid $4.35 to $868.55. Comex September copper was nearly flat, edging down just 0.75 cent to $3.2495 a pound.

Net long or short positioning in the CFTC data reflect the difference between the total number of bullish (long) and bearish (short) contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.

The commission issues two reports each Friday -- a so-called "legacy" report and a "disaggregated" report, started in 2009 and meant to offer more detail.

The gold net-long position fell in both reports due to a combination of long liquidation, in which bullish trades sell to exit their positions, and fresh short positions, or bearish bets.

"Gold specs got short again on a lack of follow-through from last week's geopolitical events and an explicit mention from (Federal Reserve Chair Janet) Yellen that rate rises could occur sooner if the recovery accelerated," said TD Securities.

In the disaggregated report, money managers trimmed their gold net long to 131,971 contracts for futures and options combined from 144,272 the week before. This was the result of a 5,990 decrease in total longs (liquidation) and 6,312 increase in total shorts (fresh selling).

The legacy report painted a similar picture, with the net long of the non-commercial accounts – better known as the funds -- declining to 160,173 lots from 170,091 the prior week. This occurred as the number of total longs fell by 5,873 and the number of total shorts rose by 4,046.

Meanwhile, net length for silver rose to the highest levels since September 2010 in both the legacy and disaggregated reports. The rises were mainly due to short covering.

Money managers in the disaggregated report upped their silver net long to 46,795 lots from 44,517 the prior week. The rise occurred as the number of total shorts fell by 2,288. There was little change in the number of total longs -- a decline of just 10.

In the legacy report, the non-commercials' net long climbed to 51,799 lots from 49,503 the prior week. This occurred as the amount of short covering (decline of 2,910 total shorts) exceeded the amount of long liquidation (decline of 615 total longs).

"Silver specs continued to cover shorts…taking us toward multi-year net-long highs, and leaves it now difficult to envision new sources of further upward momentum," said TD Securities.

Net length fell modestly for the platinum group metals.

In the disaggregated report, money managers' platinum net long fell to 41,636 lots from 43,685 the prior week. In the legacy report, non-commercials trimmed their net long to 49,452 from 51,675.

In the case of palladium, money managers trimmed their net long to 20,245 lots from 20,706. Non-commercials cut their net long to 23,517 from 23,690.

Meanwhile, for copper, money managers' net long rose to 48,994 lots from 38,367 the prior week, while the non-commercials' net long climbed to 14,660 from 7,128. The rises were mainly due to fresh buying, as money managers increased total longs by 10,358 in the disaggregated report, while non-commercials upped their gross longs by 10,975.

"Copper specs reacted positively to Chinese economic data, but some are taking the opportunity to fade the enthusiasm due to upcoming supply side growth," said TD Securities.

Courtesy: Kitco News