Editor’s Note: With such market volatility, stay on top of the daily news! Check out our quick roundup of today’s must-read news and expert opinion in minutes. Sign up here!
(Kitco News) – Hedge funds increased their bearish rates in the gold market as the price failed to exceed $ 1,800 an ounce, disappointing many investors.
Interest in gold has declined since the start of the year, analysts say, as investors see significant gains in other commodities. Specifically, speculative dynamics in copper and palladium pushed prices to new all-time highs in excess of $ 4.50 per pound and $ 3,000 per ounce, respectively.
Many analysts say that while gold remains an attractive asset for long-term protection against rising inflation, speculative capital will flow where there is momentum.
“There is a lot of competition in gold, but now is not the time to challenge gold,” Bob Haberkorn, senior commodity broker at RJO Futures, said in a recent interview with Kitco News. “Gold is struggling right now, but at some point it will have its own sunny day.”
The CFTC Traders Commitment Report for the week ending April 27 showed that CFMs increased their speculative gross long positions in Comex gold futures by just 301 contracts to 117,144. At the same time, short positions rose 6,074 contracts to 66,493 contracts.
Gold’s net length is currently 50,651, down 10% from the previous week. During the study period, gold prices re-tested resistance just below $ 1,800 before they faced selling pressure.
Despite growing disappointment in the gold market, many analysts say a breakout of $ 1,800 is inevitable as inflationary pressures continue to rise, keeping real interest rates at historically low levels.
“While institutional churn continues to weigh on the yellow metal as nominal rates increasingly fail to account for the impact of a single reflationary trade, the Fed’s commitment to ‘Average inflation targeting’ can serve as an argument for a period of time during which policy remains zero but inflation comes out. beyond the limits. This indicates a more favorable context for investment flows on the horizon, ”said analysts at TD Securities.
While hedge funds are unhappy with gold price movements, they are increasing their bullish silver rates.
The detailed report showed that speculative money-managed gross long positions in silver futures on the Comex rose 2,790 contracts to 64,769 contracts. At the same time, short positions increased by only 221 contracts to 28,213 contracts.
Silver’s net length is currently 36,556 contracts, up 7.5% from the previous week. The net length of silver is currently at its highest level since late February.
During the study period, silver prices managed to hold critical support above $ 26. Silver continues to outperform gold as the gold-to-silver ratio holds near a monthly low, last traded at 66.68 points.
Ole Hansen, head of commodity strategy at Saxo bank, said silver prices are rising as improved global economic conditions continue to support industrial demand for precious metals.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee this accuracy. This article is for informational purposes only. This is not a call for the exchange of goods, securities, or other financial instruments. Kitco Metals Inc. and the author of this article is not responsible for loss and / or damage arising from the use of this publication.