Gold: bulls go on counterattack

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

After a weekly decrease, large speculators (NON-COMMERCIAL) increased their net position to buy gold contracts by 11.3 thousand, bringing the total to 135.2 thousand. This marks the third time in the last four weeks that these large speculative players have increased their net position.

Hedger operators have been increasing their net position to sell gold contracts for 3 out of the last 4 weeks, with the most recent increase being 8.1 thousand contracts to a total of 152.9 thousand.

The number of open contracts decreased by 3.1 thousand, bringing the total to 438.1 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 0.21 points to 2.32 over the course of the week.

Data from the Commitment of Traders (COT) report indicates that bullish sentiment is on the rise. After a week-long hiatus, traders resumed adding to their net position in anticipation of higher prices. Large funds decreased their sales by 8% for the week, while purchases were also increased. If this trend continues, it could lead to an increase in the price of gold.

The net position has been relatively stable for two weeks, hovering around the same levels as at the start of the year, indicating a certain degree of market uncertainty.

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 much impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade 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.