Gold turned to growth?

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

After a 5-week decline, large speculators (NON-COMMERCIAL) increased their net buying position in gold by 21.3k contracts, bringing it up to 123.3k. This is the first time the net position has grown since March 7, when it reached its lowest point.

Hedger operators saw a 19.6k contract increase in their net sell position of gold, bringing it up to 140.6k after a 5-week decline.

The number of open contracts rose by 12.6 thousand to a total of 442.8 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.27 over the course of the week, reaching a total of 2.09.

Gold's Commitment of Traders (COT) data is indicative of bullish growth. After a sharp 5-week decrease, traders increased their net position in response to rising prices. This net position has been growing from levels that were nearly non-existent over the past 6 months. Large funds decreased sales by 9% for the week, while purchases were increased by 4%. If this trend continues, it could lead to further price appreciation for the precious metal.

It is advisable to wait for the data of the next report, which will be released in a week, to affirm the reversal of the net position.

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.