Gold: speculators are cautious

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

For the second week in a row, large speculators (NON-COMMERCIAL) have increased their net position to buy gold contracts, rising from 123.3 thousand contracts to 138 thousand. This marks a 14.7 thousand contract increase and is the highest net position since March 7th, following five weeks of reduction.

Hedgers (COMMERCIAL) increased their net position to sell gold contracts for the second week in a row, this time by 17.6 thousand contracts to a total of 158.2 thousand.

The number of open contracts decreased by 4.1 thousand, bringing the total to 438.7 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 0.32 over the week, reaching 2.41.

Data from the Gold COT report indicates that bullish sentiment is on the rise. After a 5-week decline, traders have increased their net position on rising prices for two weeks in a row. This has resulted in the net position reaching its highest level in the past six months. Large funds have also decreased their sales by 13% for the week. If this trend continues, it could lead to an increase in gold prices.

Speculators remain cautious, not opening any purchases, but rather taking profits from sales.

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, usually 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. Open interest is the total of all open positions in the market.