Speculative Buyers Mostly Return to Precious Metals

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"After cutting bullish exposure to New York precious metals futures and options markets in May, speculators have mostly returned to buy back precious metals, according to U.S. government data released Friday."

Kitco, Debbie Carlson

After cutting bullish exposure to New York precious metals futures and options markets in May, speculators have mostly returned to buy back precious metals, according to U.S. government data released Friday.

During May, speculators trimmed their net-long positions in both base and precious metals, eventually going net short in copper. This action followed the price weakness that plagued the markets most of May. As prices for precious metals rose going into the reporting period, speculators sought to increase their bullish holdings for all but platinum in both the legacy and disaggregated weekly commitment of traders reports released by the U.S. Commodity Futures Trading Commission for the week ended June 5. Activity for platinum was divided in the two reports, while copper saw speculators hike short positions.

Although the data show a rise in the speculative long positions overall, analysts at Barclays Capital warn that since the cutoff date for the information was June 5, before the market sold off on Thursday.

The rebound in exposure was driven by gold, which was notably supported by rising prospects of central-bank easing, said Anne-Laure Tremblay, precious-metals strategist at BNP Paribas, although only the People's Bank of China and Royal Bank of Australia have so far cut rates lately.

Despite the gains in speculators net-long position overall, she urged caution. "With uncertainty in the markets remaining high, the recent recovery in precious metals buying interest is still fragile," she said. . .View Full Article

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