Gold trades above US$4,000 after eight-week speculative retreat
CFTC figures through Oct. 20 show managed-money net longs fell 28.2 per cent, leaving later selling outside the positioning snapshot.
Theo Marchetti
Gold traded at US$4,014.65 an ounce at 7:04 a.m. EDT on Monday, before morning gains in producers listed on the New York Stock Exchange. Regulatory data showed speculative net-long exposure had declined for eight consecutive weeks through Oct. 20.
The Commodity Futures Trading Commission's combined futures-and-options dataset puts managed-money net longs in COMEX gold at 108,685 contracts on Oct. 20. That compares with 151,315 contracts on Aug. 25, a decline of 28.2 per cent.
The positioning snapshot ends before the subsequent trading sessions. It cannot establish how speculators traded during the later sell-off or identify what caused Monday's rebound.
Newmont Corporation NYSENEM rose 0.40 per cent to US$109.26 in New York at 10:46 a.m. EDT on Monday, according to Google Finance. The share quote comes later than the bullion snapshot, so the observations do not measure simultaneous returns.
Speculative Exposure Fell For Eight Weeks
The weekly figures also show that a smaller net position does not necessarily mean an increase in bearish bets. Managed-money long positions fell to 124,476 contracts on Oct. 20 from 128,542 a week earlier.
Short positions also declined, reaching 15,791 contracts from 17,463. The reduction in longs exceeded the reduction in shorts, leaving net exposure lower.
Those changes produced a weekly net-long decline of 2,394 contracts. The calculation subtracts short positions from long positions and excludes the separately reported spreading category.
BullionVault's Oct. 26 analysis described the longer retreat as comparatively modest against historical episodes of falling speculative exposure and gold prices. That is a comparison with earlier periods, rather than evidence that the remaining positions must be liquidated.
The positioning figures also predate the Oct. 22 U.S. jobless-claims release, another economic observation for investors tracking gold.
Read more: US jobless claims fall to 194,000 as continuing claims rise
Mine Costs Shape Shareholder Exposure
Agnico Eagle Mines Limited TSEAEM NYSEAEM also advanced on Monday. Its Toronto shares rose 1.16 per cent to C$246.21 at 10:34 a.m. EDT on Monday, according to Google Finance TSEAEM.
For shareholders in producers, reported operating performance provides a separate measure from the bullion quote. Newmont's Oct. 22 results reported third-quarter gold by-product all-in sustaining costs of US$1,454 an ounce and improved its full-year outlook for that non-GAAP measure to US$1,520.
"We produced approximately 1.3 million attributable gold ounces, and generated $1.9 billion of free cash flow," Newmont chief executive Natascha Viljoen said in the Oct. 22 release.
Production, operating costs and investment spending help determine how a gold price translates into cash available to shareholders. The quoted spot price is a market snapshot, while those reported costs and cash flows cover a completed quarter.
Newmont's Oct. 22 release sets Nov. 25 as the record date for its US$0.26 quarterly dividend. Payment is scheduled for Dec. 21, determining when that declared cash return reaches eligible shareholders.
