Money Managers Add To Bullish Positioning In Gold
(Kitco News)- Largespeculators upped their net bullish positioning in gold futures while trimmingtheir bearish posture in silver during the most recent reporting week for datacompiled by the Commodity Futures Trading Commission.
“Goldand silver put up a fight against the stronger dollar, with both managing tohold onto key support at $1,300/oz and $16/oz, respectively,” said OleHansen, head of commodity strategy at Saxo Bank
During the week-long period to May 8covered by the report, Comex June gold rose $6.90 to $1,313.70 an ounce. Julysilver rose 34.5 cents to $16.472.
Netlong or short positioning in the CFTC data reflect the difference between thetotal number of bullish (long) and bearish (short) contracts. Traders monitorthe data to gauge the general mood of speculators, although excessively high orlow numbers are viewed by many as signs of overbought or oversold markets thatmay be ripe for price corrections.
Thecommission issues two reports each Friday -- a so-called “legacy” report and a“disaggregated” report, started in 2009 and meant to offer more detail.
The CFTC’s disaggregated report showedthat money managers’ net-long position in gold futures upticked to 41,639 contractsfrom 39,317 lots the week before. This occurred as the amount of short coveringoutpaced the long liquidation, as traders were exiting positions on both sidesof the market. The number of total longs fell by 9,556 lots, while the numberof total shorts fell by 11,878.
“Gold speculators marginally increasedtheir net length this week, as a resurgent dollar imposed a drag on prices, butthe FOMC [Federal Open Market Committee members] advised that their inflationtarget was ‘symmetric,’” said TD Securities.
“This suggests the Fed is ready tomaintain its ‘go-slow’ approach despite an uptick in inflation, implying thatreal rates are set to remain low, which convinced the bears to cover theirshorts. However, as the DXY [dollar index] broke through 92.50 resistance, withthe yellow metal nearing $1,300/oz technical support, some bulls were alsoconvinced to liquidate their longs.”
In the case of silver, speculators scaledback their net short slightly to 19,483 futures contracts from 23,886 contractsthe week before. This was mostly due to fresh buying, as the number of longsrose by 4,624.
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