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Money managers hike bullish positioning in gold futures

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(Kitco News) - Money managers started rebuilding their net-bullish positioning in gold futures during the most recent reporting period for data compiled by the Commodity Futures Trading Commission.

Commerzbank analyst Carsten Fritsch pointed out that data for the week through June 16 showed the first increase in speculative net length in four weeks. During the previous reporting week, the net-long position had fallen to the lowest level since May 2019.

“The proximity of the price to its 7½-year high is likely to lure in further buyers,” Fritsch added, referring to the continued increase in prices since cut-off date for the last CFTC report.

During the week-long period to June 16 covered by the most recent CFTC data, Comex August gold     rose by $14.60 to $1,736.50 an ounce, while July silver slipped 14.2 cents to $17.652. Both are higher so far Monday, with August gold trading at $1,775.80 an ounce as of 10:06 a.m. EDT, while July silver was at $18.145.

Net long or short positioning in 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.

The CFTC's "disaggregated" report showed that money managers' net-long position in gold rose to 104,688 futures contracts as of June 16 from 91,177 the week before. The bulk of the increase was the result of fresh buying, as total longs rose by 9,538 lots. There was also short covering, as reflected by a 3,973 decline in gross shorts.

“Some of the money that was moving into the stock market...may be looking for a safer haven because of the uptick in the coronavirus cases,” said Phil Flynn, senior market analyst with at Price Futures Group. “Remember, gold didn’t really perform well with all of the stimulus the last couple of weeks because stocks were doing so well.

“But now with the coronavirus and risk aversion, [interest] seems to be moving back to gold.”

In silver, money managers' net-long position rose to 27,238 futures contracts from 23,022 the prior week. This was due to both fresh buying (gross longs rose by 3,191) and short covering (total shorts fell by 1,025).

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