Silver: speculators aggressively buying the precious metal ahead of the Fed meeting

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

Non-commercial large speculators significantly increased their net buying position in silver by 23.6k contracts, bringing it up to 43.9k. This was a sharp increase from the early April lows two weeks prior. The net position surpassed the levels of the current year and reached its highest point since April 19, 2022.

Hedgers (COMMERCIAL) have been increasing their net sell position in silver for the past three weeks, with the latest increase being 24.3k contracts, bringing their total to 56k.

The open interest rose by 26.6 thousand contracts, bringing the total to 146.9 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.70 over the week, reaching a total of 2.35.

Silver's Commitment of Traders (COT) data has shown a significant increase in bullish sentiment. After two months of contraction (with some interruptions), traders have significantly increased their net position in anticipation of rising prices. This net position has now surpassed the levels of the current year and is the highest it has been in the past 15 months. Large funds have increased their purchases by 49% in the last week alone. If this trend continues, it could lead to an increase 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, have little influence 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.