Hedge funds’ bullish bets on gold jump to four-year high
Hedge funds and other large speculators boosted their net-long position in gold.
On Friday, the gold price built on recent gains to trade at a six-week high after panic about China’s economic slowdown saw US stock markets suffering one of its worst one day falls since the global financial crisis.
In late afternoon dealings in New York, gold futures with December delivery dates added $6.70 or 0.6% to $1,159.90 an ounce, ending at the highs for the day in massive volume with roughly double the daily average number of contracts changing hands.
Gold is now up 7% from a more than five-year closing low of $1,084 struck August 5 as China’s economic woes and shock currency devaluation send ripples through markets and burnish gold’s allure as a storer of wealth. Gold was also boosted by Fed minutes released on Thursday that indicated a rate hike is less likely in September which hurt the dollar.
The turnaround in sentiment has also spread to large speculators on the futures market which until this week held bearish positions not seen since at least 2006, when the Commodity Futures Trading Commission first began tracking the data.
According to the CFTC’s weekly Commitment of Traders data for the week to August 18 speculators’ short positions– bets that gold could be bought cheaper in the future –were cut by more than a million ounces to 10.4 million ounces (295 tonnes); down from record levels of more than 330 tonnes hit last month.
At the same time longs grew by 500,000 ounces which means large gold futures investors such as hedge funds, referred to as “managed money” now hold a net long or bullish position, albeit a small one.
That reverses the net short position entered into during the week to July 21 for the first since at least 2009.
8 Comments
rayban
I shall be more convinced when I see consolidation at higher levels . Gold still looks heavy and Wah Streat still bothers me with the hate Gold mongering . Paranoid maybe , Really , what suddenly changed , I aint c n it . I wait a bit more for the trap often chases the Fox . Albeit watching really closely now , it is shapn up to bn ?
Gene Byrge
I will try to give it to you in an abbreviated report. Once upon a time a man sat under an apple tree, and an apple fell upon his head. He then proclaimed that if one sits under an apple tree one may be struck by a falling apple. And he decided to name this effect the law of gravity. And to this very day things go up, and things come down. And certain folks attempt to predict these occurrences. They are called by various names, brokers, traders, etc.Sometimes they guess right, and sometimes not. The best weather forecasters usually are not far off 50-50. So smile on the good days and take Tylenol on the bad days, and cling tightly to the world as it spins around.
God Bless
Edmund Mcgrath
stock whores still hocking their wares on the cable stock market informercial; channels CNBC Foxbiz Bloomberg…they hate with a Lion vs Hyena irrational verocity both Goid and it’s holders… .
David_R59
This’ll make those shares in short-gold-ETFs much cheaper. Just what I need to buy more.
Getting ready for the sub-$1,000 gold price later this year.
Harold
I have read many articles by experts on gold and silver and reached one conclusion, GOD made gold and silver and when everything else disappears into ashes gold and silver will still be here, just like everyone who believes in Christ, we will go through the fire and when everything and everyone else are gone we who believe in Jesus Christ as Lord and Savior will remain standing beside him.
Gene Byrge
David_R59
You sound like a nice sort of guy, so let me advise you to stock up on acetaminophen. Bon Voyage !
Gene Byrge
Keep going fellows, rest assured that at some point lucidity will intrude.
Gene Byrge
Here we are with our differences of opinion and celebrating our right to exercise them.
God Bless America