Funds Up Net Long In Gold, Add To Silver Net Short
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(Kitco News) -Largespeculators increased their bullish positioning in gold futures but also uppedtheir net bearish position in silver during the latest reporting week for data compiledby the Commodity Futures Trading Commission.
Duringthe week-long period through Feb. 20 that was covered by the report, Comex April gold was nearly flat -falling 60 cents to $1,331.40 an ounce. March silver
fell13.5 cents to $16.40.
Netlong or short positioning in the CFTC data reflect the difference between thetotal number of bullish (long) and bearish (short) contracts. Traders monitorthe data to gauge the general mood of speculators, although excessively high orlow numbers are viewed by many as signs of overbought or oversold markets thatmay be ripe for price corrections.
Thecommission issues two reports each Friday -- a so-called “legacy” report and a“disaggregated” report, started in 2009 and meant to offer more detail.
The disaggregated report shows that moneymanagers increased their net-long position in gold to 175,455 lots from 169,757the prior week. This was due to mainly to fresh buying, as gross longs rose by4,215 contracts, as well as short covering, which was reflected by a drop of1,483 total shorts.
“Gold specs increased their net length, as traders added totheir longs and sharply covered their shorts as the yellow metal neared$1,360/oz once again,” said a research note from TD Securities. “But amid moreconfidence with respect to the growth outlook, concerns about higher rates havebeen mounting, which prompted a bounce in the dollar that gave no respite togold bugs. However, angst that the Fed may be behind the curve could wellprompt investor interest in gold to grow.”
In silver, money managers’ net-shortposition now stands at 10,522 lots, compared to a net short of 8,290 theprevious week. This was due to a combination of long liquidation, as grosslongs fell by 1,310 lots, and fresh selling, as reflected by an increase of 922total shorts.
“Speculativefinancial investors expanded their net long positions in gold for the firsttime in four weeks in the week to 20 February, whereas silver saw a furtherrise in speculative net shorts,” Commerzbank said. “This is consistent with theincrease in the gold/silver ratio to a good 81 in the reporting week.”
Thegold/silver ratio measures how many ounces of silver it take to buy an ounce ofgold, with a large number meaning silver is underperforming gold.
By Allen SykoraFor Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.