Hedge funds aren’t afraid of type talk, increasing bullish bets on gold – CFTC
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(Kitco News) – Hedge funds seeking a hedge against low volatility inflation have turned to the gold market again as speculative bullish bets pushed prices to resistance levels reviews, according to the latest data from the Commodities Futures Trading Commission.
Some analysts have noted that gold has sparked a surge in speculative interest, with cryptocurrencies experiencing a significant increase in volatility. While bitcoin appears to be finding some support after last week’s big selloff, the market has recently seen daily price swings of $ 1,000. Currently, bitcoin prices are down about 42% from their record highs last month.
Analysts have noted that bitcoin is once again proving to be too volatile to be a safe-haven asset and, more importantly, a hedge against the growing inflationary threat.
The CFTC’s disaggregated trader commitments report for the week ending May 18 showed that fund managers increased their gross speculative long positions on Comex gold futures from 10,481 contracts to 141,776. at the same time, short positions increased by 106 contracts to 49,786.
Gold net length now stands at 91,990 contracts, up almost 13% from the previous week. Gold’s new bullish momentum helped prices break above $ 1,850 an ounce, a critical resistance point that represented the precious metal’s 200-day moving average.
Gold has failed to stage a three-week buying spree of this magnitude since last June, and it highlights the continuing improvement in the technical outlook during a period of stable Treasury yields, one dollar higher. low and most importantly increased volatility in crypto currencies, ”said Ole Hansen, head of commodities strategy at Saxo Bank.
TD Securities commodities analysts said the technical outlook for gold will continue to improve as inflationary pressures continue to rise.
“The more favorable technicalities have finally seen fund managers aggressively adding to their long positions. Tap-talk is prominent in Precious Metals, but investors are sounding the alarm bells about the price. ‘inflation, the interest of institutions in the precious metals complex is expected to continue to rise, providing a strong offset against fears of typing for the time being,’ analysts said.
John Reade, head of market research at the World Gold Council, said in a recent Twitter comment that although gold has had an impressive run, speculative interest is still far from its previous highs.
– John Reade (@JReade_WGC) May 24, 2021
With gold sparking new speculative interest, many analysts are now watching the next major resistance target of $ 1,900 an ounce.
“Gold prices started the year at $ 1,918, so if we go back there, the market will be positive for the year, and that will attract even more momentum,” said Phillip Streible, chief strategist of the market at Blue Line Futures.
As hedge funds turn to gold again, they become increasingly bearish on silver.
The disaggregated report showed that gross speculative cash-managed long positions on Comex silver futures contracts increased by 343 contracts to 73,685. At the same time, short positions increased by 1,823 contracts to 28,674 contracts. .
Silver’s net length currently stands at 45,011 contracts, down 3% from the previous week. This is the first drop in bullish speculative silver interest in six weeks.
During the IP, silver prices tested resistance just below $ 29. The precious metal is currently trying to maintain support around $ 28 an ounce.
Money sentiment is shifting as industrial demand begins to weaken, some analysts say.
The change in sentiment comes as hedge funds continue to liquidate their bullish bets on copper.
The disaggregated report showed that gross speculative silver-run long positions on high-quality Comex copper futures fell by 10,233 contracts to 85,005. At the same time, short positions fell by 717.
contracts at 34,314.
Net copper length currently stands at 50,691 contracts, down almost 16% from the previous week.
During the IP, copper prices failed to break resistance above $ 4.80 per pound.
“We are nearing the peak of reflation and speculators are just starting to sell off their copper length. With the red metal trading near historic highs, evidence of waning appetite among U.S. consumers and weaker Chinese demand for commodities amid ongoing deleveraging. Our commodity demand signals are also showing emerging signs of easing, despite increased risk sentiment and the weakening US dollar, ”TD Securities analysts said.
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