Gold: traders updated the three-month "bottom" of the net position

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 15.4k contracts, bringing it down to 160.2k. This decrease follows a two-week period of buildup, and the net position is now lower than it was at the end of May, reaching its lowest point since March 21.

Hedger operators decreased their net short position on gold contracts by 12.1k contracts to 186.1k after a two-week period of increasing their position.

The number of open contracts decreased by 3.4 thousand, bringing the total to 432.9 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.45 over the week, bringing it to 3.39.

The latest Gold COT data indicates a bearish sentiment among traders. After a two-week period of increasing their net position, traders have now reduced their holdings on rising prices. This has resulted in the net position reaching its lowest level in almost three months. Large funds have decreased their purchases by 4% for the week, while sales have also increased. If this trend continues, it could lead to a 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, 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.