Gold: net position approaching July peaks

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 buy gold contracts by 16.3 thousand contracts, bringing the total to 171.7 thousand. This is the highest net position since July 25, and marks the fifth week out of the last six that these speculators have increased their buying.

Hedger operators have been increasing their net position for selling gold contracts for 5 weeks out of the last 6, with the latest figures showing a 13.2 thousand contract increase to 190.2 thousand for commercial hedgers.

The number of open contracts rose by 21.8 thousand, bringing the total to 508.4 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 0.18 over the week, reaching a total of 2.75.

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. This resulted in the net position reaching its highest level in the past 4 months. Large funds increased their purchases by 6% for the week, while sales were also reduced. If this trend continues, it could lead to an increase in the price of gold.

The latest Commitment of Traders (COT) report was postponed due to US holidays. COT reporting data is essential and is mainly used for medium to long-term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) tend to trade in the same direction as the trend (blue line). On the other hand, small speculators, NONREPORTABLE POSITIONS, usually do not have a significant 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.