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(Kitco News) – Hedge funds appear to be making gains on their bullish gold bets as the price continues to hold initial support above $ 1,800 an ounce, according to the latest trade data from the Commodity Futures Trading Commission (CFTC) .
Although speculative bullish gold bets fell slightly last week, analysts remain optimistic that prices will stay on their long-term bullish trend.
“The falls continue to be bought and that shows that there is an underlying strength in the market, “Bob Haberkorn, senior commodity broker at RJO Futures, said in a recent interview with Kitco News.
The CFTC’s disaggregated Trader Commitments report for the week ending July 14 showed that money managers decreased their speculative gross long positions in Comex gold futures by 2,410 contracts to 177,400. At the same time, short bets fell 1,960 contracts to 42,427.
Although the net length of gold remained relatively unchanged, the drop in bullish bets caused the net length of gold to drop for the first time in four weeks; The net length of gold is now 134,973, down 3% from the previous week.
TD Securities analysts said the change in investor sentiment could continue to weigh on gold in the near term. They noted that the strength of resistance in the US dollar and the lack of new information on the stimulus measures of world monetary policy will continue to affect the yellow metal.
“Given that gold is at the top of the trading range and has become quite crowded, the lack of new and important macro information probably means that next week’s report will see similar specification dynamics,” analysts said. .
Commerzbank analysts also see gold prices struggling to find new momentum above $ 1,800 an ounce; however, they added that they expect this to be a short consolidation period.
“We believe it is only a matter of time before gold resumes its recovery,” analysts said. “After all, there is still considerable investor interest, as you can see from the continued ETF inflows.”
Although the momentum of gold is starting to stagnate, silver is attracting a lot of attention as hedge funds increase their upside bets and reduce their short exposure.
The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures increased by 3,404 contracts to 65,615. At the same time, short positions fell by 3,207 contracts to 22,988.
Silver’s net length increased to 42,627 contracts, more than 18% from the prior week. Renewed investor interest pushed silver prices to a new multi-year high at prices above $ 19 an ounce.
“Silver has been more popular than gold with investors for months,” analysts at Commerzbank said.
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