Hedge Funds Continue To Pile Into Gold And Silver
Hedge funds and money managers continued to pile into gold and silver as both markets saw their speculative net-long positioning expanded once again, according to the latest data from the Commodity Futures Trading Commission (CFTC).
The disaggregated Commitments of Trader report, for the week ending April 19, showed money managers increased their speculative gross long positions in Comex gold futures by 6,161 contracts to 208,661. At the same time, short bets rose by 2,688 contracts to 34,554. The latest data shows the gold market is net long by 174,107 contracts.
Despite the increase in gold's speculative net length, prices were relatively unchanged, showing a decline of 0.24% during the survey period.
In a report published Monday, commodity analysts at Commerzbank noted that gold's speculative length remains at its highest level since February 2012. They added that they could see continued profit taking as short-term investors take their profits.
However, Phil Streible, senior market strategist at RJO Futures, noted that the data is a little bit behind the market as the outlook has changed as a result of Thursday's sharp selloff, which saw gold fall 2.2% in the day and which was not part of the latest survey data.
"The next report is going to show that a lot of investors headed for the exits. I don't think gold is a crowded trade anymore," he said. "I think both gold and silver are going to go higher as equities start to correct."
While gold's net length is at its highest point in more than three years, silver continues to outperform as speculative interest has expanded to new records.
The disaggregated COT report showed money-managed speculative gross long positions in Comex silver futures rose by 7,760 contracts to 77,534. At the same time, short positions fell by 4,125 contracts to 9,631. After hitting a three-year high, the silver market's net length now stands at 670,903 contracts.
Ole Hansen, head of commodity strategy at Saxo Bank, noted in a report Monday that silver's net length increased more than 21% from the previous week.
During the survey period, May Comex silver futures rallied 5.6%. Most of those gains were seen on the April 19, the final day of the survey, as prices pushed past $17 an ounce. However, analysts will be interested to see how the silver market has fared after last week's sharp selloff, which saw prices fall back below $17 an ounce.
Commerzbank said that silver's extended net length makes it vulnerable to a further correction.
By Neils Christensen |
