Hedge funds are still somewhat reluctant to jump into the gold market, even if they drop their bearish bet when the price of gold rises above $ 1,800, according to the latest data from the Commodity Futures Trading Commission.
Hedge funds cut bearish bets when gold prices rise above $ 1,800
Some analysts said a break at $ 1,850, which also represents gold’s 200-day moving average, could be a sign that hedge funds and money managers are waiting to increase their bullish positions in the gold market. Some analysts said it is only a matter of time before investors turn to gold as an inflation protection, as the Federal Reserve is not expected to tighten ultra-accommodative monetary policies anytime soon.
The CFTC released its report for the week ending May 4, showing that money managers increased their speculative gross long positions in Comex gold futures by only 290 contracts to 117,434. At the same time, short positions fell from 2,684 contracts to 63,809. Gold’s net length now stands at 53,625, an increase of about 6% compared to the previous week. During the survey period, the gold price recorded a successful trial with $ 1,800.
Commodity analysts at Commerzbank: Gold could become more attractive
TD Securities commodity analysts said in a note, “Money managers increased the length of gold by offsetting relatively large amounts of short-term risks. “The environment has become more favorable for yellow metal and the possibility of strong price increases has increased,” he said. Analysts reported an inflow of about six tons on Friday to the SPDR Gold Trust, the world’s largest gold ETF. This is the most obvious daily entry since mid-January.
Commodity analysts at Commerzbank said the latest CFTC report was a bit outdated because the gold rally started at the end of the survey period. The bank added that an increase in investor demand for products traded on the gold-backed exchange provides a better picture of the precious metal’s newly discovered momentum. Commodity analysts at Commerzbank said:
Real interest rates are likely to shift further into the negative zone. This should make gold more attractive as an interest-free investment and protection from inflation. Given this development, investors seem to be showing more interest in gold ETFs again.
TD Securities analysts: It’s only a matter of time before gold prices exceed $ 1,850
TD Securities analysts said they expected gold prices to exceed $ 1,850 only a matter of time. TD Securities analysts said:
Given that the US nominal rates tend to trend lower as they rise further along the curve, it points to additional upward price pressure that should see additional short-term collaterals and new long-term transactions in the coming weeks. A disappointing jobs report with higher-than-expected wage increases and unemployment rates show that gold is well positioned to challenge technical resistance around $ 1,850 / ONS.
OCBC Bank economists: We are closely watching $ 1,850 for the price of gold
OCBC Bank economists said on Monday they are watching closely for the price of gold at $ 1,850. “The $ 1800 level seems to be the new level of support for gold right now, and we expect buying interest in gold in the short term due to the weak labor market report from the US,” analysts said. While hedge funds are reluctant to enter the gold market, funds continue to pile up on silver as the speculative bullish interest rate reaches its highest level since the beginning of the year.
The disaggregated report showed that the speculative gross long positions managed by money in Comex silver futures increased by 1,933 contracts to 66,702. At the same time, short positions fell to 24,148 with 4,065 contracts. Many analysts said silver will continue to outperform gold. Gray metal continues to benefit from monetary policy as investors seek protection from rising price pressures. Analysts also added that increased industrial demand as the global economy begins to open up will also support prices.