Hedge funds were quick to take profits quickly and close their short positions in the gold market, as the US dollar seemed to have finished its march to the top after hitting a 20-year high.
“The market saw a bull run of $3.3 billion last week”
According to some analysts, a weak US dollar not only helped change the mood in the gold market, but also recession Falling bond yields also supported the precious metal as fears escalated.
As you can follow from Cryptokoin.com news, the dollar index (DXY) fell 1.45%, the biggest weekly drop since July 2020, and the yellow metal made it more attractive. “10-year real interest rates fell slightly by 6 basis points, lowering the opportunity cost of holding non-yielding assets like gold,” commodity analysts at Société Générale wrote in a note Monday. The French bank also notes that the gold market saw a bull run of $3.3 billion last week.
“Change in speculative rate ended five-week increase in bear position”
Commodity Futures Trading Commission (CFTC) May 24 The Commitments of Traders report for the week ended in , showed that money managers increased their speculative gross long positions in Comex gold futures by 5,602 contracts to 121,174. At the same time, short positions fell by 12,095 contracts to 60,117.
Gold’s net position currently stands at 61,057 contracts, up about 41% from the previous week. According to experts, the change in speculative interest ended the five-week increase in the bear position. During the survey period, gold prices managed to climb above $1,850 per ounce, but prices have stalled since last week’s move.
Net long positions decline in gold futures
Some analysts say gold’s recent price action is not surprising. They cite technical oversold gold after falling below $1,800 per ounce in mid-May.
Net long position purchases in gold futures have been declining since mid-March. However, when it retraced into the 170-180k region, it marked a bottom before rising once again. Two weeks ago it dropped to 175k and went up to 183k contracts and prices also went up. “This is why we suspect the correction in oil is now complete,” said Matt Simpson, senior market analyst at City Index.
Bart Melek says he still likes to rally in the gold market
However, as the US dollar may experience a short-term correction, all analysts He is not optimistic that gold prices are ready to rise. Bart Melek, head of commodities research at TD Securities, says he still likes to rally in the gold market as the Federal Reserve is expected to raise interest rates aggressively over the summer.
Bart Melek said Friday that the specifications have plenty of room to take new shorts and cut longs. Meanwhile, the speculative mood in the gold market is on the rise, while hedge funds have added silver to the bear trend.
