Gold: hedgers updated 1.5-year peaks of net position

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

Non-commercial large speculators increased their net position to purchase gold contracts by 13.1 thousand contracts, bringing the total to 201.3 thousand. After a weekly decrease, these large speculative players have been increasing their net position for 8 out of the last 10 weeks. This net position is now nearing the highest levels seen since April 26, 2022.

Hedgers (COMMERCIAL) have been steadily increasing their net position for selling gold contracts over the past 8 weeks out of the last 10. This has resulted in a 14.3 thousand contract increase to 227.1 thousand, surpassing the levels of early December and becoming the highest since May 10, 2022.

The number of open contracts rose by 11.3 thousand to reach 481.2 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 by 0.32 to 3.53 over the week.

Data from the Gold 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. The net position of hedgers has reached its highest level in over a year and a half, and the net position of large speculators is now closer to that of hedgers. Large speculators increased their purchases by 3% over the week, while sales were also reduced. If this trend continues, it could lead to an increase in gold prices.

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds), usually trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have a major 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.