Gold: speculators cut sales by 9%, but purchases are small

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

Non-commercial large speculators increased their net buying position in gold by 6.3k contracts, bringing the total to 175.6k. This marks the second consecutive week of net buying after two weeks of decline, and the position is now higher than it was on March 21, the lowest point in recent weeks.

Hedgers (COMMERCIAL) increased their net sell position on gold contracts for the second week in a row, this time by 8.2k contracts to 198.2k.

The number of open contracts decreased by 13.2 thousand, bringing the total to 436.3 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.35 over the week, bringing it to 3.84.

Gold's Commitment of Traders (COT) data is indicative of bullish growth, as traders have been increasing their net position on rising prices for the second week in a row. This net position has been growing from its minimum levels over the past two months. Large funds have reduced their sales by 9% for the week, while purchases have also been slightly increased. If this trend continues, it could contribute to further growth 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, do not have much of an effect 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.