Gold price: The tension on the futures market is rising!

Gold price hardly changed

Last week’s trading session brought little change in the price of gold and little new insight into possible short-term developments. The minutes of the US Federal Reserve’s 29-30 October meeting published last Wednesday confirmed expectations that there will be no further rate cuts in the US this year. There were no market moving economic data and no new insights into the trade dispute between the US and China.

 

Forward traders in position

There is still no big sell-off of gold on the US futures market. The traders are waiting. What’s more, futures trading again reached a record high in open contracts. The current CoT data from trading gold futures on the US commodity futures exchange COMEX showed the following changes in the positions of the largest trading groups on November 19, 2019.

 

Banking group with 596 t gold net-short

The net short position of the “Commercials” rose by almost 6 percent to 319,095 contracts compared to the previous week. Net sales of swap dealers (including major banks) rose by 7 per cent to 191,857 contracts. This group was thus below the line with the equivalent of 596 tonnes of gold on the selling side. This is the highest value since 20 August 2019.

 

Speculators optimistic

It looks similar on the opposite side. The net long position of the “big speculators” rose by 7 percent to 285,859 contracts. The forward purchases of managed money (hedge funds, investment companies) increased by 11 percent to 195,199 contracts net. This theoretically corresponds to 607 tonnes of gold. These traders are thus positioned almost as optimistically as at the end of October. By way of comparison, the previous record was set on 5 July 2016 with 273,076 contracts (net long), equivalent to 849 tonnes.

 

2,236 tons of “paper gold

Open Interest, i.e. the sum of all open gold contracts on COMEX, reached a new record of 719,211 contracts as part of the weekly CoT data. This represented an increase of 3.39 percent over the previous week and a trading volume of the equivalent of 2,236 tonnes of gold. By the close of trading last Friday, however, the same percentage had fallen again to 694,803 contracts. The price of gold fell by 0.3 percent last week to 1,462 US dollars per ounce (FOREX).