Speculators buy gold for the third week in a row

According to COT reports (Commitments of Traders), provided by the Commission for Trade Futures (CFTC) – for the week ending last Tuesday, large speculators (Non-Commercial) increased the net position for the purchase of gold contracts for 19.1 thousand contracts to 210.7 thousand . Large speculative players build up a clean position to buy the second week in a row after a 2-week cut. Pure position has become the maximum from June 1.

Headiers (Commercial) increased the net position for the sale of gold contracts by 20.7 thousand. contracts up to 234.7 thousand Hedger operators are increasing the net position for sale also for the second week in a row. Open interest increased by 19.3 thousand contracts to 504.7 thousand. The bullish index of large speculators (the ratio of the number of purchase contracts to the number of sales contracts) increased over the week by 0.07 to 3.38.

Summary

The COT gold reports reflect the growth of bullish sentiment. Traders for the second week are increasing their net position on price growth. At the same time, the net position has become the maximum over the past almost three months. Large funds increased gold purchases by 5% over the week, sales were also reduced. At the same time, large speculators have been increasing purchases for the third week in a row, the volume of their long positions has become the maximum for six months. The continuation of this trend can contribute to higher prices for the noble metal.

Note: COT report data is fundamental and used mainly for medium- and long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade on a trend. Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend. The net position is the difference between the number of purchase and sale contracts (the green line on the chart is the net position of large speculators; blue line – net position of hedgers). An open interest is the sum of all open positions in the market.