Speculators Hike Net-Long Gold Positions


"Investors have been a major force in recent rally of gold prices."

Investor interest in gold jumped as prices held and advanced over $1,200/oz. as safe-haven buying resumed.

According to data from the U.S. CFTC, the weekly commitment of traders showed speculators added to long gold futures positions in the week ending Aug. 17.

Looking at the disaggregated futures and options combined data, the managed-money accounts added 16,233 longs are now net-long 182,276 contracts, the largest net-long for them since the week of July 13, when their net-long positions totaled 187,077. The peak for the year 2010 to date was 230,422 on May 18.

Similarly, in the legacy futures and options report, funds added 19, 557 contracts to make them net-long 226,964.

Commercials and swap dealers in the disaggregated reports added to their net-shorts, with the producer category increasing shorts by 10,271 contracts to make them net-short 172,129. Swap dealers hiked their short contracts by 11,878 to be net-short 100,750 contracts. Commercials in the legacy futures and options report raised 25,854 short contracts and are now net-short 272,879.

During the timeframe the report covers, Aug. 10 to Aug. 17, gold prices on the Comex division of the New York Mercantile Exchange rallied $30/oz. for the December contract. A trigger for the rally was holding over $1,200/oz. Prices started at $1,198, which was the settlement on Aug. 10 and settled at $1,228.30 on Aug. 17, and prices continued to rise that week.

"This shows that financial investors have been a major force in this recent rally of gold prices. In the reporting week up to last Tuesday, prices advanced by 4%," said Commerzbank in a research report on Monday.

Barclays Capital said in a research report Monday, using the legacy futures-only data, that the rise in fund longs was the largest one week rise on a net basis since late April.

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