Market News Underweight expectations weaken investment interest, precious metals are struggling with cold reception
Underweight expectations weaken investment interest, precious metals are struggling with cold reception
According to the latest trading data of the Commodity Futures Trading Commission (CFTC), the coldness of the gold market continues to heat up as hedge funds close their bullish bets. The price of gold has not been able to hold the rise above US$1835 per ounce. Since mid-July, the price of gold has tested this key resistance level four times, but has not been able to break through. The sluggish market interest in the precious metals market pushed the price of gold back to a level slightly below US$1,800 per ounce.
2021-09-14
10324
According to the latest trading data of the Commodity Futures Trading Commission (CFTC), the coldness of the gold market continues to heat up as hedge funds close their bullish bets. The price of gold has not been able to hold the rise above US$1835 per ounce. Since mid-July, the price of gold has tested this key resistance level four times, but has not been able to break through. The sluggish market interest in the precious metals market pushed the price of gold back to a level slightly below US$1,800 per ounce.
Gold prices encountered headwinds in early August, as the U.S. dollar briefly strengthened and rising US Treasury yields put pressure on investment funds, which triggered momentum selling shortly thereafter. Gold prices rebounded later that month, but did not stimulate sufficient capital inflows, and global gold holdings fell to 3,611 tons ($211 billion), the lowest level since May 2.
According to a report released by the World Gold Council, the price of gold fell by about 0.6% in August. The average daily trading volume of gold fell to US$141 billion, which was far below the level of US$165 billion in July and the average daily trading volume of US$163 billion. This is due to the fact that trading volume on the New York Mercantile Exchange has fallen to a year-to-date low.
(As of August the flow of funds in the global gold market)
Ole Hansen, Head of Commodity Strategy at Saxo Bank, recently stated that although investors continue to buy gold when the price of gold fell below $1,800, there is no major motivation for investors to buy gold aggressively. He added that if there is a strong momentum above $1,835 per ounce, speculative interest will heat up. As for what factors will trigger a new round of gold buying, Hansen said that he is paying close attention to whether the dollar is showing signs of weakness.
Hansen said in another report, "Unless the 10-year nominal yield breaks through the key resistance level of 1.38%, which may trigger a negative reaction, we believe that the US dollar will become the main focus of gold traders in the short-term."
The Commodity Futures Trading Commission's (CFTC) trader commitment sub-report for the week ending August 24 showed that fund managers reduced the total speculative long positions of Comex gold futures by 7511 lots to 1,520,044 lots. At the same time, the short position increased by 6,571 hands to 61,449. The net long position of gold is currently 67,595 lots, a decrease of 17% from the previous week. On the last day of the investigation period, the price of gold faced tremendous selling pressure and fell below US$1,800 per ounce.
TD Securities Commodity Analyst said: "Despite the overall downward trend in interest rates, the weakening of the U.S. dollar and the firming of gold prices in the previous week, fund managers have chosen to significantly reduce their long exposure to gold and increase short positions. As the Fed prepares to begin to reduce the aggressive In the asset purchase plan, investors seem to expect that real interest rates will rise and capital inflows into gold will decrease."
The silver market performed slightly better than gold because hedge funds made up for their bearish bets; however, they were still reluctant to make any major bullish bets. The report showed that the total long positions of silver futures on the New York Mercantile Exchange managed by funds increased by 398 hands to 49,406 hands. At the same time, the short position decreased by 5105 lots to 31630 lots. Silver net long was 17,776 lots, an increase of 44% from last week. During the investigation, the price of silver rose to a one-month high. However, since then, the price of silver has been unable to maintain above $24 per ounce.
Although it is difficult for silver to attract bullish momentum, many analysts believe that silver has greater potential than gold due to increased industrial demand, especially green energy demand. Last week, the U.S. Department of Energy stated that by 2035, 37% of U.S. electricity will come from solar energy. By 2050, solar energy will occupy more than 40% of the market share. Currently, only 3% of the electricity in the United States comes from solar energy. Silver is a key component of photovoltaic solar panels.
The general anxiety among investors is also reflected in the copper market. Copper prices are still below the record high set just 4 months ago. The latest COT data shows that investors are reducing their overall exposure to copper. Copper's sub-report shows that the total speculative long positions of funds managed by the New York Mercantile Exchange copper futures decreased by 1097 lots to 57092 lots. At the same time, short positions decreased by 910 lots to 26,311 lots. Commodity analysts at TD Securities said: "Speculative interest in copper has ceased, and there have been very few short covering increases in long positions last week."
This week, the price of gold fell into range trading, struggling below the $1,800 mark. In the case of insufficient liquidity, in the face of a rebound in U.S. Treasury yields after a continuous decline in the previous four months and the deceleration of exchange-traded fund (ETF) flows since July, some investors are uneasy, leading to investment demand decline. Looking ahead, although unfavorable factors such as the central bank's reduction of bond purchases may still exist, driven by seasonal consumer demand and co-investment flows, historically, the precious metals market tends to experience strong growth in September. The continued high inflation reports in various regions and the mid-level stock returns in emerging markets have prompted more investors to hedge their portfolios and may also form some support for gold prices.
In the early trading of the Asian market on Tuesday, spot gold prices were basically stable, still trading below the 1800 level. Investors are paying close attention to the evening US CPI data in order to obtain further clues about the level of inflation.
(Spot gold daily chart)
GMT+8 At 08:57 on September 14, spot gold was quoted at $1,79.18 per ounce.
Hedge funds have reduced their bullish positions, and the gold market is struggling
Gold prices encountered headwinds in early August, as the U.S. dollar briefly strengthened and rising US Treasury yields put pressure on investment funds, which triggered momentum selling shortly thereafter. Gold prices rebounded later that month, but did not stimulate sufficient capital inflows, and global gold holdings fell to 3,611 tons ($211 billion), the lowest level since May 2.
According to a report released by the World Gold Council, the price of gold fell by about 0.6% in August. The average daily trading volume of gold fell to US$141 billion, which was far below the level of US$165 billion in July and the average daily trading volume of US$163 billion. This is due to the fact that trading volume on the New York Mercantile Exchange has fallen to a year-to-date low.
(As of August the flow of funds in the global gold market)
Ole Hansen, Head of Commodity Strategy at Saxo Bank, recently stated that although investors continue to buy gold when the price of gold fell below $1,800, there is no major motivation for investors to buy gold aggressively. He added that if there is a strong momentum above $1,835 per ounce, speculative interest will heat up. As for what factors will trigger a new round of gold buying, Hansen said that he is paying close attention to whether the dollar is showing signs of weakness.
Hansen said in another report, "Unless the 10-year nominal yield breaks through the key resistance level of 1.38%, which may trigger a negative reaction, we believe that the US dollar will become the main focus of gold traders in the short-term."
The Commodity Futures Trading Commission's (CFTC) trader commitment sub-report for the week ending August 24 showed that fund managers reduced the total speculative long positions of Comex gold futures by 7511 lots to 1,520,044 lots. At the same time, the short position increased by 6,571 hands to 61,449. The net long position of gold is currently 67,595 lots, a decrease of 17% from the previous week. On the last day of the investigation period, the price of gold faced tremendous selling pressure and fell below US$1,800 per ounce.
TD Securities Commodity Analyst said: "Despite the overall downward trend in interest rates, the weakening of the U.S. dollar and the firming of gold prices in the previous week, fund managers have chosen to significantly reduce their long exposure to gold and increase short positions. As the Fed prepares to begin to reduce the aggressive In the asset purchase plan, investors seem to expect that real interest rates will rise and capital inflows into gold will decrease."
Investment interest in the precious metals market has greatly diminished, and shorts have the upper hand
The silver market performed slightly better than gold because hedge funds made up for their bearish bets; however, they were still reluctant to make any major bullish bets. The report showed that the total long positions of silver futures on the New York Mercantile Exchange managed by funds increased by 398 hands to 49,406 hands. At the same time, the short position decreased by 5105 lots to 31630 lots. Silver net long was 17,776 lots, an increase of 44% from last week. During the investigation, the price of silver rose to a one-month high. However, since then, the price of silver has been unable to maintain above $24 per ounce.
Although it is difficult for silver to attract bullish momentum, many analysts believe that silver has greater potential than gold due to increased industrial demand, especially green energy demand. Last week, the U.S. Department of Energy stated that by 2035, 37% of U.S. electricity will come from solar energy. By 2050, solar energy will occupy more than 40% of the market share. Currently, only 3% of the electricity in the United States comes from solar energy. Silver is a key component of photovoltaic solar panels.
The general anxiety among investors is also reflected in the copper market. Copper prices are still below the record high set just 4 months ago. The latest COT data shows that investors are reducing their overall exposure to copper. Copper's sub-report shows that the total speculative long positions of funds managed by the New York Mercantile Exchange copper futures decreased by 1097 lots to 57092 lots. At the same time, short positions decreased by 910 lots to 26,311 lots. Commodity analysts at TD Securities said: "Speculative interest in copper has ceased, and there have been very few short covering increases in long positions last week."
This week, the price of gold fell into range trading, struggling below the $1,800 mark. In the case of insufficient liquidity, in the face of a rebound in U.S. Treasury yields after a continuous decline in the previous four months and the deceleration of exchange-traded fund (ETF) flows since July, some investors are uneasy, leading to investment demand decline. Looking ahead, although unfavorable factors such as the central bank's reduction of bond purchases may still exist, driven by seasonal consumer demand and co-investment flows, historically, the precious metals market tends to experience strong growth in September. The continued high inflation reports in various regions and the mid-level stock returns in emerging markets have prompted more investors to hedge their portfolios and may also form some support for gold prices.
In the early trading of the Asian market on Tuesday, spot gold prices were basically stable, still trading below the 1800 level. Investors are paying close attention to the evening US CPI data in order to obtain further clues about the level of inflation.
(Spot gold daily chart)
GMT+8 At 08:57 on September 14, spot gold was quoted at $1,79.18 per ounce.
Bonus rebate to help investors grow in the trading world!
Or try Free Demo Trading