FOCUS: Speculators Pick Up Gold, Shed Other Precious Metals In CFTC Data

A rise in gold prices amid worries about Cyprus teetering on the edge of bankruptcy renewed speculators’ love for gold in times of trouble, coming at the expense of other precious and base metals futures and options markets traded on the Comex division of the New York Mercantile Exchange.

According to data in the weekly Commitment of Traders report released late Friday by the Commodity Futures Trading Commission, speculators snapped up bullish positions in gold in both the disaggregated and legacy reports. The speculators’ net-long positions are now at their highest level since Feb. 12 in both reports. Reductions in net-long positions were seen in silver and the platinum group metals, while speculators massively increased their net-short position in copper.

Except for gold, prices for the metals were mostly lower during the week to March 19, which is the timeframe covered by the report. April Comex gold rose $19.60 to $1,611.30 an ounce as of March 1. May silver fell 32.80 cents to $28.843. Nymex April platinum slid $39.60 to $1,555.40, while June palladium dropped $40.30 to $735.20. Comex May copper fell 14.9 cents to $3.4055 a pound.

Managed-money accounts significantly increased their net-long position in gold, raising it to 70,193 contracts, a 62% increase over the week before. This big swing came as managed-money accounts added 13,263 gross longs and sliced 13,735 gross shorts, which meant speculators added new bullish positions and covered short positions. Producers added to their net-short position by adding more gross shorts than gross longs. Swap dealers also bolstered their net-short positions by cutting a hefty number of gross longs and adding gross shorts.

Non-commercials in the legacy report mirrored the action in the disaggregated report, although the size of the net-long increase was less intense. They added 9,794 gross longs and cut 15,908 gross shorts, another sizeable adding of new bullish positions and paring back bearish positions. They are now net-long 127,996 contracts, which was a 25% increase over the previous week. Commercials are net-short and significantly boosted that position by adding to gross shorts and slicing gross longs.

Safe-haven demand sent investors into gold, several market watchers said, as the timeframe covered the initial news about Cyprus.

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