Gold: net position updated the March "bottom"

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators decreased their net buying position in gold by 11.1k contracts to 151.9k. This follows a weekly increase, and marks the fourth time in the last seven weeks that the net position has been reduced. The current net position is the lowest it has been since March 14.

Hedgers (COMMERCIAL) have decreased their net sell position on gold contracts by 11.2k contracts, bringing it down to 175.3k. Over the past 7 weeks, they have decreased their net sell position 4 times.

The number of open contracts decreased by 6.2 thousand, bringing the total to 431.9 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.26 over the week, bringing it to 3.20.

After a week-long break, traders resumed their bearish sentiment on gold prices, as reflected in the COT data. The net position has updated the lows for the last 3.5 months, with large funds reducing their purchases by 4% and increasing their sales for the week. If this trend continues, it could lead to a further decrease in the price of the precious metal.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little 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, while open interest is the total of all open positions in the market.