Hedge funds cool the price of gold but still love silver

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(Kitco News) – Hedge funds appear to be taking profits on their bullish gold bets as the price continues to maintain initial support above $ 1,800 an ounce, according to the latest trade data from the Commodity Futures Trading Commission (CFTC).
Although bullish speculative bets on gold edged down last week, analysts remain optimistic that prices will remain in their long-term uptrend.
« Dips continue to be bought and it shows that there is an underlying force in the market, ”said Bob Haberkorn, senior commodity broker at RJO Futures, in a recent interview with Kitco News.
The disaggregated report on CFTC traders’ commitments for the week ending July 14, showed that fund managers have reduced their gross speculative long positions in Comex gold futures from 2,410 contracts to 177,400. In at the same time, short bets fell from 1,960 contracts to 42,427.
Although the net length of gold remained relatively unchanged, the decline in bullish bets dropped the net length of gold for the first time in four weeks; The net length of gold now stands at 134,973, down 3% from the previous week.
TD Securities analysts said changes in investor sentiment could continue to weigh on gold in the near term. They noted that the resilient resistance of the US dollar and no new information on the stimulus packages for global monetary policy will continue to weigh on the yellow metal.
“Given that gold is in the upper end of the trading range and has become quite crowded, the lack of major new macroeconomic information likely means next week’s report will see similar specs dynamics,” said analysts.
Commerzbank analysts also see gold prices struggling to find new momentum above $ 1,800 an ounce; however, they added that they expected a short consolidation period.
“We think it’s only a matter of time before gold picks up its momentum,” analysts said. “After all, investor interest remains considerable, as evidenced by the ongoing ETF inflows.”
Although gold’s momentum is starting to slow, silver is attracting a lot of new attention as hedge funds increase their bullish bets and reduce their short exposure.
The disaggregated report showed that gross speculative cash-managed long positions on Comex silver futures contracts increased by 3,404 contracts to 65,615. At the same time, short positions fell by 3,207 contracts to 22. 988.
Silver’s net surged to 42,627 contracts, up more than 18% from the previous week. The renewed interest from investors pushed silver prices to a new multi-year high with prices above $ 19 an ounce.
“Silver has been more popular than gold among investors for months now,” analysts at Commerzbank said.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has done everything possible to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and / or damage resulting from the use of this publication.

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