Gold: Speculators reduce purchases

According to COT reports (Commitments of Traders) provided by the Commission on Commodity Futures (CFTC) – for the week ending last Tuesday, large speculators (Non-Commercial) reduced the net position for the purchase of gold contracts for 12.6 thousand contracts to 261.8 thousand . Major speculative players began to reduce the net position on the purchase after it has increased it for 5 weeks. The net position began to decline from the maximum levels from January 5, 2021.

Headers (Commercial) reduced net position For the sale of gold contracts by 9.5 thousand contracts to 297.4 thousand hedgehogs, operators began to reduce the net position for sale also after a 5-week extension.

Open interest decreased by 20.9 thousand contracts to 617.6 thousand. The bullish index of large speculators (the ratio of the number of contracts for the purchase contracts for sale) increased by 0.04 to 4.08 (by reducing sales).

Summary

Data Reports Cot on gold reflect the growth of bear moods. After 5-week extensions, traders Began to reduce the net position on the rise in prices. At the same time, the net position began to decline from maximum levels over the past 14 months. Large funds reduced purchases by 5% per week, while the volume of purchases began to decline on the maxima for 2 years. Continuation of this trend can help reduce prices for noble metal.

Note: COT report data are fundamental and used mainly for medium and long-term trading. Large speculators, non-Commercial (Banks, Invest-Funds) traded usually on trend. Hedgers, Commercial (operators, large companies) are usually traded against the trend. Pure position is the difference between the number of contracts for the purchase and sale (the green line on the chart is the pure position of large speculators; the blue line is a pure position of Hedger). Open interest is the sum of all open positions in the market.