Hedge funds stay away from gold and silver, focus on tightening monetary policies
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(Kitco News) – Hedge funds are reluctant to return to the gold market as the Federal Reserve seeks to tighten monetary policy in the face of mounting inflationary pressures, according to analysts assessing the latest trade data from the Commodity Futures Trading Commission.
Analysts note that although gold prices have managed to keep support above $ 1,750 an ounce, it has not generated enough investor interest for a sustained surge above $ 1. $ 800 per ounce.
The CFTC’s disaggregated trader commitments report for the week ending October 12 showed that fund managers increased their gross speculative long positions on Comex gold futures from 4,923 contracts to 131,668. at the same time, short positions increased from 570 contracts to 73,149.
Gold net length now stands at 58,519 contracts, relatively unchanged from the previous week. During the IP, gold prices were caught in a narrow range, maintaining support above $ 1,750 per ounce.
Although gold prices managed to climb to $ 1,800 an ounce last week, the rally was short-lived, with prices falling back to where they started the week. December gold futures traded last at $ 1,766.50 an ounce, down 0.10% on the day.
âThe prospect of a prolonged period of higher inflation has just started to be felt in asset prices. Stagflation risks associated with the energy crisis have catalyzed a rise in breakeven inflation, but have also kept nominal secret rates, âTD Securities analysts said in a report. “While this should support precious metals, especially in the context of the current energy crisis, market prices for the Fed hikes have so far kept gold prices from skyrocketing.”
Although gold prices have struggled to gain investor attention, many analysts expect the momentum to change after the Federal Reserve begins to tighten interest rates, starting with a reduction in its monthly bond purchases by the end of the year.
It is not just gold that continues to suffer from lack of investor interest.
The disaggregated report showed that gross speculative silver-managed long positions on Comex silver futures fell by 16 contracts to 47,447. At the same time, short positions fell by 428 contracts to 42,391.
The net length of money stands at 5,056 contracts, relatively unchanged from the previous week. During the IP, silver prices were successful in testing resistance around $ 23 an ounce.
Silver is weighed down by weak demand in the gold market as industrial metals see renewed investor interest, analysts say.
Copper’s disaggregated report showed that speculative cash-managed gross long positions on Comex high-grade copper futures contracts increased from 8,008 contracts to 65,593. At the same time, short positions increased. fell from 962 contracts to 30,967.
Net copper length is currently 34,626 contracts, an increase of almost 35% from the previous week. Copper prices gained further momentum during the IP as prices managed to break above initial support by around $ 4.30 per ounce.
âBuyers returned to under-held copper after price finally ignored concerns from China,â said Ole Hansen, head of commodities strategy at Saxo Bank. “The net has jumped by a third, but it remains well below the peak of 91.6,000 lots reached a year ago.”
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