Hedge funds not afraid of taper talk, increasing bullish bets on gold – CFTC
CFTC disaggregated Commitments of Traders report for the week ending May 18 showed money managers increased their speculative gross long positions in Comex gold futures by 10,481 contracts to 141,776. At the same time, short positions rose by 106 contracts to 49,786.
Gold's net length now stands at 91,990 contracts, up nearly 13% from the previous week. Gold's new bullish momentum helped prices push above $1,850 an ounce, a critical resistance point that represented the precious metal's 200-day moving average.
"Gold has not managed to put together a three-week buying spree of this magnitude since last June, and it highlights the continued improvement in the technical outlook during a period of stable Treasury yields, a weaker dollar, and not least heightened volatility across crypto currencies," said Ole Hansen, head of commodity strategy at Saxo Bank.
Commodity analysts at TD Securities said that gold's technical outlook would continue to improve as inflation pressures continue to rise.
"The more favorable technicals ultimately saw money managers aggressively add to their longs. Talk of taper talk looms large in precious metals, but with investors sounding the alarm over inflation, institutional interest in the precious metals complex is likely to continue rising, providing an offsetting force against taper fears for the time being," the analysts said.
John Reade, head of market research at the World Gold Council, said in a recent comment on Twitter that although gold has seen an impressive run, speculative interest is still nowhere near its previous peaks.
With gold attracting new speculative interest, many analysts are now keeping an eye on the next major resistance target of $1,900 an ounce.
"Gold prices started the year at $1,918, so if we move back there, the market will be positive for the year, and that will attract even more momentum," said Phillip Streible, chief market strategist at Blue Line Futures.
While hedge funds are once again shifting into gold, they are becoming more bearish on silver.
The disaggregated report showed money-managed speculative gross long positions in Comex silver futures rose by 343 contracts to 73,685. At the same time, short positions increased by 1,823 contracts to 28,674.
Silver's net length currently stands at 45,011 contracts, down 3% from the previous week. This is silver's first decline in bullish speculative interest in six weeks.
During the survey period, silver prices tested resistance just below $29. The precious metal is currently trying to hold support around $28 an ounce.
According to some analysts, silver sentiment is shifting as industrial demand starts to weaken.
Reference: Kitco
Thai
Eng