Net long gold COMEX positions up 10%, first increase in four weeks: CFTC

Net long gold positions on US commodity exchange COMEX increased 10% to 143,910 contracts in the week to October 25, Commodity Futures Trading Commission data showed Monday.

The increased bullish position is up from a seven-month low the previous week of 130,954 net long contracts, and the first increase for four weeks.

The number of short positions fell 7% on the week to around 55,000 contracts and long positions increased 5% to just under 200,000 contracts, according to CFTC data.

Gold prices are largely unchanged Monday morning, trading around $1,275/oz, just below gains made late Friday following a fall in the US dollar, which dipped on news that US presidential candidate Donald Trump had narrowed the gap in recent polls.
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The announcement of an FBI probe into democratic candidate Hilary Clinton’s emails has seen Clinton’s lead over Trump fall to below 3 points, according to a RealClear poll average as of Monday, down from double digits two weeks ago. Some US polls also showed a Trump lead over the weekend.

“We believe that the price movement at the end of last week may well be a taster of what we can presumably expect if Trump wins the election next Tuesday,” Commerzbank said in a note Monday.

This week also sees a number of important meetings from a number of central banks, including Australia, Japan, the UK and the US. Most analysts are expecting little change in monetary policy, one of the key drivers of gold prices this year.

According to CME Fed Fund Futures Friday, the chance of a rate hike at Wednesday’s Federal Reserve meeting is less than 10%, with a move by December around 75%, down slightly from 80% Thursday.

Elsewhere, investor demand for gold-backed ETFs remains weak. The world’s largest, SPDR Gold Trust, reported outflows of around 11 mt in the week to October 28.

The fund is down over 6 mt in October, with total holdings at just under 943 mt, its lowest since mid-September. The fund is up around 45% in the year to date, but has recorded overall outflows in two of the last three months.

Net long silver positions fell 6.5% to 38,401 contracts, their lowest since February, CFTC data showed. Net long positions have declined over 60% in the last four weeks, with silver trading around $17.80/oz Monday, up around 20 cents/oz from Friday afternoon.

Platinum positions fell for the 11th straight week, down 26% to 4,828 net long contracts, its lowest since 2008. Palladium positions fell by 19% to 8,354 net long contracts, their lowest since July.

South Africa’s AMCU union, the biggest union in the PGM industry, confirmed over the weekend it had agreed to a new three-year wage deal with the country’s largest producer, Anglo American Platinum (Amplats).

Amplats and AMCU agreed to annual pay hikes of between 7-12.5% over the next three years, to apply retroactively from July 1.

An agreement is also expected to be confirmed with South Africa’s other large producers, Lonmin and Impala, significantly reducing the chance of an industry strike.

Platinum is trading around $975/oz Monday, up from around $970/oz Friday.

Palladium is largely unchanged on the day at $615/oz 1100 GMT Monday.

London Platts
11/1/2016