Money Managers Triple Bullish Positioning In Gold Futures
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During the week-long period to June 4 covered by the report, Comex August gold rose $46.20 to $1,328.70 an ounce, while July silver climbed 44.9 cents to $14.769.
Net long or short positioning in the CFTC data reflect the difference between the total number of bullish (long) and bearish (short) contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.
“Interest in gold is surging amongst money managers,” said commodities brokerage SP Angel, commenting that hedge funds boost their long positions in U.S. gold futures and options combined by the most in roughly a dozen years.
For futures contracts only, these accounts hiked their net long to 96,182 contracts from 26,274 the prior week. This occurred amid a boost in both fresh buying (gross longs rose by 40,349 contracts) and short covering (the number of total longs fell by 29,559).
“Money managers aggressively added to their gold longs and covered their shorts, as global growth concerns pushed investors to gobble up U.S. Treasuries, driving yields markedly lower, ultimately increasing investors' appetite for bullion diversifiers,” said TD Securities. “As we expected, CTAs [commodity trading advisers] likely contributed to the increased length as prices broke through key trigger levels and fired off strong upside momentum signals.”
The positioning picture also improved in silver, in large part because of short covering, although industrial concerns continue to hold back the metal, TDS said.
“That being said, we would not be surprised to see algos contribute to higher net length in silver in the coming week,” analysts added.
In silver, money managers trimmed their net-short exposure to 19,536 futures contracts from 38,007 at the end the previous reporting period. There was a 7,310 increase in gross longs, while the number of short positions fell by 11,161.