Bearishness Toward Gold Trending Down

New York (HedgeCo.net) – Over the last two weeks, the Commitment of Traders report for gold has shown that large speculators have become less bearish on the metal. You will note that we said less bearish, not necessarily more bullish.

In the week ended September 15, the group that includes hedge funds and other institutional traders, were long 174,225 contracts and the group is now long 182,792, meaning they are slightly more bullish. However it is on the other side of the equation where we have seen the bigger change. The group has gone from 134,678 contracts sold short to 106,147. In all, this means the group has gone from a net long position of 39,547 contracts to net long 76,645 contracts.

If we look at the percentage changes, the number of contracts long as only increased by 4.9 percent while the number of contracts sold short has dropped 21.2 percent. The price of gold has increased two percent during the period in question.
Despite the market turmoil in recent months and stocks being down on the year, investors have not been buying gold as a source of safety as they have been prone to do in the past. Since peaking on January 22, gold is down 12.63 percent and it has not closed a week above its 52-week moving average since the last week of January.

Rick Pendergraft
Research Analyst
HedgeCoVest

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