By Neils Christensen of Kitco News

Monday January 12, 2015 11:35 AM

(Kitco News ) - Speculators continue to slowly jump back into the gold and silver markets, according to data from the Commodity Futures Trading Commission.

Net fund length has risen across all four precious metals but the sharpest recovery was in Comex gold and Comex silver, said analysts from Barclays Capital.

The CFTCs disaggregated Commitment Of Traders report showed that, for the week ending Jan. 6, money managed speculative gold future long positions increased by 4,068 contracts, bringing total long gold positions to 140,300 contracts.

Analysts at HSBC said that gross gold long positions are at their highest level in a year.

At the same time, the report shows that money managers continued to reduce their short bets in the gold markets as speculative short positions decreased by 4,275 contracts to 33,896 short contracts. Golds net long position now stands at 106,734 contracts.

Although gross short positions continue to decline, HSBC added that they remain near historical highs and leave ample room for the recent short covering rally in gold to extend, in our view.

George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures said fund managers are starting to once again take an interest in gold because it is seen as a safe-haven investment as currencies are weakening across the globe.

He adds that prices need to close above $1,225 an ounce to brighten the technical picture, and attract more investment interest.

Analysts from Bank of American Merrill Lynch said that the rise in golds net speculative position is evidence that the market has turned bullish in the medium-term. They added that prices could eventually push to a high of $1,255 an ounce.

Gold is not the only metal seeing a shift in sentiment. Net long positions are also growing in the silver market.

According to the COT report, money managed silver future long positions increased by 1,444 contracts, bringing total long positions to 40,301. At the same time, funds reduced their short exposure by 1,124 contracts, bringing the total number of short contracts to 20,681. Silvers net long position now stands at 19,620 contracts.

Silver prices rose 38.7 cents, or 2.33%, during the survey period.

Silver has predominantly benefited from additional longs, said Barclays analysts.

Steve Scacalossi, director, head of sales and global metals at TD securities, said that with speculators shifting away from their bearish positions silver prices have the opportunity to rally towards $18 an ounce, should gold continue its journey higher.