Hedge funds started liquidating their bull bets just before last week’s bullish move, according to the latest data from the Commodity Futures Trading Commission (CFTC). In this environment, the gold market continues to struggle to attract solid bull interest.
“There is still no upward trend in gold prices”
According to some analysts, the latest data continues to be in line with the sentiment in the gold market. cryptocoin.com As you can follow, the Federal Reserve has signaled that it is preparing to slow the rate of increase. Despite this, analysts expect the final rate to remain above 5% in the near future.
Many analysts say that gold benefits from hedge funds that close their short positions. However, they note that there is still no uptrend in the precious metal. “People aren’t saying let’s go long on gold,” said Kevin Grady, president of Phoenix Futures and Options. They just say let’s not stay short,” he explains. Grady notes that while gold is seeing a decent uptick as prices climb above $1,800, the buying needed for a sustainable rally is lacking.
“Belief in the market begins to grow”
Ole Hansen, head of commodity strategy at Saxo Bank, says the mood is slowly starting to change. However, he also states that there is still a lot of work to be done. In this context, the analyst makes the following statement:
Belief in the market is starting to grow. At least investors don’t want to be short anymore.
“Long positions under it are likely to decrease again”
The CFTC’s disaggregated Commitments of Traders report for the week ended November 29 showed money managers cut their speculative gross long positions in Comex gold futures to 88,032 at 4,129 contracts. At the same time, short positions increased by 582 contracts to 73,312. The gold market is currently net long with 14,720 contracts. This shows that it has remained relatively unchanged compared to the previous week.
During the survey period, gold prices held solid support above $1,750. The poll, meanwhile, does not cover Wednesday’s gold rally after Fed Chairman Jerome Powell said it would be appropriate for the central bank to slow rate hikes from December. In a note Friday, commodity analysts at TD Securities commented:
Fed Chairman Powell has convincingly signaled that he is ready to slow the pace of rate hikes from December. Also, the world believes it has seen the worst of the US rate hikes. Meanwhile, there is broad market speculation that inflation will be brought under control sooner. Given all this, gold prices have entered an upward trajectory towards $1,800. It is possible that this will re-establish the position increase next week. However, inflation is still a big problem and strong wage and employment data persists. In such an environment, long positions are likely to decline again, unless the Fed is not as dovish as currently expected on December 14th.
