CFTC’s CoT Shows Speculators Buying Gold and Silver

Speculators continue to slowly jump back into the gold and silver markets, according to data from the Commodity Futures Trading Commission.

“Net fund length has risen across all four precious metals but the sharpest recovery was in Comex gold and Comex silver,” said analysts from Barclays Capital.

The CFTC’s disaggregated Commitment Of Traders report showed that, for the week ending Jan. 6, money managed speculative gold future long positions increased by 4,068 contracts, bringing total long gold positions to 140,300 contracts.

Analysts at HSBC said that gross gold long positions are at their highest level in a year.

At the same time, the report shows that money managers continued to reduce their short bets in the gold markets as speculative short positions decreased by 4,275 contracts to 33,896 short contracts. Gold’s net long position now stands at 106,734 contracts.

Although gross short positions continue to decline, HSBC added that they remain near historical highs “and leave ample room for the recent short covering rally in gold to extend, in our view.”

George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures said fund managers are starting to once again take an interest in gold because it is seen as a safe-haven investment as currencies are weakening across the globe.

He adds that prices need to close above $1,225 an ounce to “brighten the technical picture,” and attract more investment interest.

Analysts from Bank of American Merrill Lynch said that the rise in gold’s net speculative position is evidence that the market has turned bullish in the medium-term. They added that prices could eventually push to a high of $1,255 an ounce.

via Witco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza