Gold: bulls are actively pumping up the net position from the yearly bottom

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

For the second week in a row, large speculators (NON-COMMERCIAL) have increased their net position to buy gold contracts, bringing it up to 149.4 thousand contracts - a 36.6 thousand contract increase from the minimum levels since November 1, 2022. This is now the highest net position since August 1.

Hedgers (COMMERCIAL) increased their net position to sell gold contracts for the second week in a row, this time by 37.9 thousand contracts to 165.9 thousand.

The number of open contracts rose by 23.9 thousand to a total of 463.5 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators rose 0.51 over the week, bringing it to 2.46.

The latest Gold COT reports indicate a significant rise in bullish sentiment. Over the past two weeks, traders have significantly increased their net position on rising prices from lows not seen in almost a year. This has resulted in the net position reaching its highest level in the past 2.5 months. Large funds have increased their purchases by 9% over the week, while sales have also decreased. If this trend continues, it could lead to an increase in the price of the precious metal.

COT reporting data is essential for medium to long term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) tend to follow the trend (blue line). On the other hand, small speculators, NONREPORTABLE POSITIONS, usually do not have a major impact 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. Open interest is the total of all open positions in the market.