as revealed here – confirmation of speculator net long gold positions smallest since 2008

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From the Kitco site

One the two reports compiled by the Commodity Futures Trading Commission reviewing weekly trading positions shows large speculative traders cut their bullish gold futures and options holdings to the smallest ever, according to data released late Friday.

In the Dec. 3 commitments of traders disaggregated report, these traders narrowed their net-long position in gold futures and options traded on the Comex division of the New York Mercantile Exchange to the lowest level since the report started in September 2009. In the older legacy report, large speculators also cut their net-long position to the lowest since July 16. That’s also significant as the net-long positions reported in July were some of the lowest tallies in recent years.

This is the fifth straight week of these traders trimming bullish exposure to gold. Additionally, they cut back on silver positions for the fifth consecutive week, with large speculators turning net-short silver in the disaggregated report. Bullish position cutbacks were also seen in the platinum group metals, while these traders lightened up on their bearish copper holding.

Metals prices fell during the week covered by the report. February Comex gold slid $20.70 an ounce to $1,220.80 as of Dec. 3. March silver lost 82.8 cents to $19.065. Nymex January platinum slid $16.10 to $1,355.80. March palladium fell $3.65 to $714.80. Comex December copper fell 5.15 cents to $3.1675 a pound.

The net-long gold futures and options position for the managed-money accounts now sits at 26,774 contracts. Managed-money accounts cut 294 gross longs and added 4,667 gross shorts, meaning they sold bullish positions and added bearish ones, keeping with the recent trend. Producers’ net-long position grew somewhat, but only because they cut more gross short positions than gross longs. Swap dealers lowered their net-short position modestly as they cut more gross shorts than gross longs, also cutting exposure overall.

To give an idea of just how small is the managed money net-long position, Aakash Doshi, analyst at Citigroup Global Markets, noted the trailing 12-month average managed money net long position is 67,212 contracts.

Barclays’ analysts said gross long positions are holding near “levels last reached in 2008, while shorts have risen to levels last reached in July, underlying the negative sentiment towards gold. Should tapering not be announced at the December meeting, there would be substantial room for short-covering activity.”

In the gold legacy report, the large speculators decreased their net-long position by adding 3,723 gross shorts versus only 32 gross longs. They are now net-long 48,536 contracts, the lowest since July 16. Commercials are net-short, but also slashed that position by cutting many more gross shorts than gross longs, reducing exposure in general.

For the first time since June 18, managed-money accounts turned net-short silver in the disaggregated report. They are net short 5,386, which is their largest net-short position since the report started in September 2009. They cut 1,221 gross longs and added 4,875 gross shorts to flip their orientation.  Producers lowered their net-short position by reducing exposure on both sides, and by cutting more gross shorts than longs. Swap dealers added to their net-long position by adding more gross longs than gross shorts.

In the legacy report, the silver net-long for non-commercials was cut nearly in half from the previous week’s level as these traders added more gross shorts, 5,157 contracts, than gross longs, 1,138 contracts, to lower the net-long 4,293 contracts, the smallest since June 4. Commercials are net-short, but saw a swift drop in that position as they cut gross shorts and added gross longs.

Managed-money accounts in platinum decreased their net-long position for the fourth week in a row, to 16,249 contracts, having cut 76 gross longs and added 3,214 gross shorts.  Non-commercials in platinum also decreased their net-long position, but for the third straight week. It now is 23,460 contracts, having added 151 gross longs and added 3,595 gross shorts.

“Platinum spec (speculative) longs continue to hold steady, but those with a short-bias continue to build up positions, as above-ground inventory concern spars with the longer-term supply/demand deficits picture,” said TD Securities.

In palladium the managed-money accounts cut their net-long position to 20,658 contracts, the fourth consecutive drop. They cut 512 gross longs and added 98 gross shorts. In the legacy report, non-commercials cut 588 gross longs and 31 gross shorts, lowering their net-long to 21,909 contracts, the third week in a row to see a fall in the net-long.

The copper net-short position for the managed-money accounts fell to 19,316 contracts, as they added 1,045 gross longs and 623 gross shorts. Funds lowered their net-short position in the legacy report, having added 1,740 gross longs and cut 855 gross shorts. They are net-short 27,477 contracts.

TDS said since London Metal Exchange coppers price held support around $7,000, it may have encouraged speculative traders to bet that support would continue to hold.

For further information, see the CFTC’s website:http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm

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