(Kitco News) - Speculative traders were sellers almost across the board in precious metals, as prices had begun to turn south in U.S. futures and options, according to U.S. government data released late Friday.
But the data from the Commodity Futures Trading Commission is only current through Dec. 13, and several market watchers said it’s possible the trend of cutting bullish exposure in the metals markets may continue when fresh reports are released at the end of the week. Most notably, Barclays Capital pointed out that gold crossed below the 200-day moving average on Wednesday, so the sell-off sparked when that technical level was crossed isn’t included in this data.
Reductions in net-long positions were seen in both the disaggregated and legacy weekly commitment of traders reports in all markets but in the legacy silver report, which showed a modest rise in the net-long position. The data encompasses both the futures and options activity combined at the Comex division of the New York Mercantile Exchange and the Nymex.
During the timeframe measured, most-active February gold futures contract on Comex lost $68.70 an ounce and settled at $1,663.10 on Dec. 13. Comex March silver fell 1.484 cents an ounce to settle at $31.260. January Nymex platinum dropped $31.70 an ounce to settle at $1,492.30 and March Nymex palladium lost $7.75 an ounce to settle at $664.15. Comex March copper slid 13.4 cents a pound to $3.4415.
Managed-money traders’ net-long position now stands at 135,117. They cut 13,656 gross longs and added 2,573 gross shorts. This is smallest net-long for speculators since mid-October. The producer and swap dealer categories showed these market participants added to gross long positions and cut gross shorts, lowering their respective net short position.
In the legacy report, large speculators, known as non-commercials, decreased gross longs by 15,955 contracts and raised gross shorts by 3,343 contracts, pushing down their net-long position to 163,169 contracts. Commercial traders increased gross longs and decreased gross shorts, shrinking their net-short position.
Commerzbank said the fall in speculators net-long positions “confirms our belief that the declining price of gold has been driven to a major extent by the futures market, for holdings of gold ETFs (exchange-traded funds) remain at very high levels.”
Managed-money accounts added to both gross longs and shorts in silver, but the number of new gross shorts outweighed new gross longs. That decreased their net-long for silver to 11,864. They raised gross longs by 428 contracts and added 1,019 gross shorts.
Producers in silver cut more longs than shorts, lifting their net short position and swap dealers added longs and cut shorts, lowering their net-short position.
Citi Global Futures said the funds net long exposure is historically small, which might mean a new cycle of buying could be starting; however, money managers in silver have a habit of just abandoning the silver market for extended periods.
The speculator category in the legacy silver report showed an increase in gross longs of 2,203 contracts and a rise in gross shorts of 1,426 contracts, meaning the net-long position for silver rose modestly to 17,802 contracts, bucking the trend seen in the disaggregated report and of other metals. Commercials lowered their net-short position in silver, having cut gross shorts and increased gross longs.
Activity by speculators was mixed in the platinum group metals. Both metals saw a drop 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 11,838 contracts in platinum, as they cut more gross longs than shorts. In palladium, managed-money accounts added both gross longs and shorts, but added more shorts than longs, lowering the net-long to 5,334 contracts.