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Peter Davis

An writer at FOMOdrive

  • Jun 19, 2023
  • 2 min read

Gold: "net-long" speculators updated highs over the past year

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators increased their net buying position in gold by 10.3k contracts, bringing it up to 195.6k. This was a reversal of the 3-week decline, and the net position is now at its highest level since May 3, 2022.

Hedger operators saw a 5.7k contract increase in their net sell position of gold, bringing it up to 217.6k. This was a reversal of the 3-week decline, and the net position is now close to the levels seen in early April, the highest since May 3, 2022.

The number of open contracts rose by 20.6 thousand, bringing the total to 493.8 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.20 over the week, reaching a total of 3.93.

Gold's Commitment of Traders (COT) data is indicative of bullish growth. After a 3-week hiatus, traders resumed increasing their net position on rising prices. The net position of large speculators reached its highest level in the last year, while the net position of hedgers came close to matching it. Large funds increased their buying by 4% for the week, and selling was also reduced. If this trend continues, it could contribute to the further appreciation of gold prices. 

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little influence on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts, while open interest is the total of all open positions in the market.

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