Gold: speculators updated 20-month peaks of net position

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

Non-commercial large speculators increased their net position to purchase gold contracts by 6.4 thousand contracts, bringing the total to 207.7 thousand. This marks the second consecutive week of increases in the net position, and for 9 out of the last 11 weeks. The net position has now surpassed the levels seen in early December, and is the highest it has been since April 26, 2022.

Hedgers (COMMERCIAL) have seen a 5.3 thousand contract increase in their net position for selling gold contracts, bringing it up to 232.3 thousand. This marks an increase in the net position for selling gold contracts for 9 out of the last 11 weeks. The current net position is the highest it has been since April 26, 2022.

The open interest rose by 10.1 thousand contracts, bringing the total to 491.3 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators stayed the same over the week, at 3.53.

The latest Gold COT report shows that traders are becoming increasingly bullish on the precious metal. Over the past two months, they have been steadily increasing their net position on rising prices. This has resulted in the net position of large speculators reaching its highest level in the past 20 months, while the net position of hedgers has also been updated. Last week, large speculators increased their purchases by 3%, suggesting that the trend may continue and lead to higher gold prices.

Large speculators increased their sales, despite the fact that their bullish index remained unchanged. Some of them were expecting a decrease in prices.

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.