Money Managers Trim Bearish Position In Gold Slightly
(Kitco News) - Largespeculators maintained net bearish positioning in gold futures although theyscaled this back some during the latest reporting week for data compiled by theCommodity Futures Trading Commission.
Duringthe week-long period to Oct. 2 covered by the report, Comex December gold uptickedby $1.90 to $1,207 an ounce, while December silver climbed 20 cents to $14.693.
Net long or shortpositioning in the CFTC data reflect the difference between the total number ofbullish (long) and bearish (short) contracts. Traders monitor the data to gaugethe general mood of speculators, although excessively high or low numbers areviewed by many as signs of overbought or oversold markets that may be ripe forprice corrections.
The commission issues tworeports each Friday -- a so-called “legacy” report and a “disaggregated”report, started in 2009 and meant to offer more detail.
Money managers have beenpositioned bearishly for some time, but the data show that the pessimism ofthese accounts did not increase, pointed out analysts with Commerzbank. Theynoted that the week to Oct. 2 brought about “moderate short covering ingold and also in silver.” Short covering is when traders with bearish, orshort, positions enter the market to buyin order to exist or cover their positions.
The disaggregated reportshowed that the net-short gold position of money managers fell modestly to79,603 futures contracts from 83,677 the week before. The number of longsclimbed by 2,158 lots, while the number of shorts declined by 1,916.
Overall, speculative investors maintained “their bearish stranglehold on theyellow metal as Fed Chair [Jerome] Powell's statements looked to assure themarket that the removal of ‘accommodative’ did not signal any policy change,”said a research note from TD Securities.
“In addition, disappointing economic data inChina saw the yuan weaken, while a recent steepening of the U.S. yield curvealso helped to further bolster the negative precious metals outlook,” TDS said.“So long as the USD [U.S. dollar] and Fed expectations remain unchanged, weexpect that interest in precious metals will remain muted.”
Meanwhile, in silverfutures, money managers trimmed their net-short position to 36,070 contractsfrom 42,683 the week before. This was due to short covering, as the number oftotal shorts declined by 8,611. In fact, the net-short position declined eventhough the number of longs also fell to the tune of 1,998 contracts.
By Allen SykoraFor Kitco News
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