Speculators Help Push Gold Net Long Position To August High
Net-long positions in gold futures hit their highest level since August due to a mix of renewed investor interest and short-covering, according to data from the Commodity Futures Trading Commission.
According to the commitment of traders disaggregated report, for the week ending Dec. 9, managed money gold long positions increased by 14,430 contracts to 143,086; at the same time, short-covering also added to the net-long position as speculators cut their short positions by 10,604 contracts to 38,554. Gold’s net-long position now stands at 104,532 contracts.
Gold prices saw a strong move higher during the survey period, breaking through a key support area of $1,221 an ounce, closing Dec. 9 at $1,232 an ounce.
Bart Melek, head of commodity strategy at TD Securities said that the increase in long positions could be an indication that traders are betting the U.S. Federal Reserve, which meets on Wednesday will delay signaling future rate hikes.
However, he added the gold price still remains sensitive as a significant portion of long positions are the result of short covering and this move could be close to exhausting itself.
Silver also saw more positive flows as long positions increased by 607 contracts to 39,534; however there is still significant short-covering in the marketplace as short positions were cut by 4,914 contracts to 14,778. Silver’s net long position now stands at 19,950 contacts.
Analysts at Bank of America Merril Lynch noted that speculators bought silver contracts at the strongest pace in three months. |
