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Reduction of long positions on metals


Relevance up to 08:00 2022-01-19 UTC+00

The gold market is still above $1,800 an ounce while waiting for the Fed’s more aggressive action, which is trying to control the growing inflationary threat and curb inflation with a four-time rate hike.

Speculations that a March rally was inevitable prompted investors to sharply reduce their long positions and expand their short positions in gold.

Analysts at TD Securities noted that it is still possible for real interest rates to remain low, even though the US central bank seeks to tighten its policy.

Based on the CFTC’s disaggregated weekly traders commitment report, financial managers reduced their Comex’s speculative long positions in gold futures by 4,955 contracts to 119,297. At the same time, short positions increased by 243 contracts, reporting to 44,987.

The net length of gold currently stands at 74,310 contracts, which is 6% less than the previous week.

The silver market is also struggling as hedge funds increase their bearish trades and liquidate their bullish positions.

According to the disaggregated report, Comex’s speculative long positions in silver futures fell by 1,279 contracts to 50,316 contracts, while short positions grew by 2,696 contracts to 32,514 contracts.

The net length of silver is 17,802 contracts, which is 18% less than in the past week.

In any case, some economists don’t expect silver to strongly increase any time soon. Commodity analysts at Credit Suisse believe that the gray metal could likely decline to $18.64. In order to attract new bullish attention, prices must rise to $25 an ounce.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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