Gold: net position correction completed?

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

After a two-week increase, large speculators (non-commercial) decreased their net position to buy gold contracts by 14.1 thousand contracts, bringing the total to 123.9 thousand. This is the closest the net position has been to its lowest level since March 7th.

Operator hedgers decreased their net position to sell gold contracts by 13.4 thousand, bringing the total to 144.8 thousand after a two-week increase.

The open interest rose by 2.5 thousand contracts, bringing the total to 441.2 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 0.30 over the week, bringing it down to 2.11.

Data from the Gold COT report indicates a growing bearish sentiment. After a two-week period of rising prices, traders resumed reducing their net position. This has caused the net position to return to levels that have been minimal over the past six months. Large funds have increased their sales by 14% in the last week. If this trend continues, it could lead to a decrease in the price of gold.

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually follow 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 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.