Gold: net position renewed three-month peaks

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

For the third consecutive week, large speculators (NON-COMMERCIAL) increased their net position to purchase gold contracts, bringing the total to 163.4 thousand contracts - the highest level since August 1st. This week alone, they added 14 thousand contracts.

Hedgers (COMMERCIAL) increased their net position to sell gold contracts for the third consecutive week, this time by 16.8 thousand contracts to a total of 182.7 thousand.

The open interest rose by 12.3 thousand contracts, bringing the total to 475.8 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 0.21 to 2.67 over the week.

Data from the Gold COT report shows that traders are becoming more bullish. For the past three weeks, they have been buying more gold, pushing prices up from their yearly lows. This has resulted in a new high in the net position over the last three months. Large funds have increased their purchases by 4% in the last week, while sales have also decreased. If this trend continues, it could lead to an increase in the price of gold.

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 significant 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.