Gold: speculators are aggressively selling the precious metal

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 21.8 thousand contracts, bringing it down to 121.1 thousand. This marks the fourth consecutive week of reduced net buying by these large speculative players, and the net position is now the lowest it has been since March 7th.

Hedgers (COMMERCIAL) decreased their net sell position on gold contracts by 25.6k contracts to 141.9k. This marks the fourth consecutive week that hedger operators have reduced their net sell position.

The open interest rose by 5.9k contracts, bringing the total to 433.6k.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.59 over the course of the week, bringing it to a total of 2.08.

The latest Gold COT data indicates a bearish sentiment among traders. For the past month, traders have been pushing their net position higher as prices have risen. This has resulted in the net position reaching its lowest level in the last 5 months. In the last week, large speculators have increased their sales by 30%, which could lead to further declines in the price of gold if this trend continues.

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.