(Kitco News) – As fickle as the shifting sands in an hourglass, investment sentiment in the gold market has reversed again with fund managers giving up most their long bets from the previous week and adding fresh short positions, according to the latest trade data.
The CFTC’s disaggregated Commitments of Traders report, for the week ending May 21, showed money managers decreased their speculative gross long positions in Comex gold futures by 23,481 contracts to 114,986. At the same time, short bets rose by 13,128 contracts to 99,049. The gold market managed to hold on to its net-long positioning by 15,937 contracts, a decline of 69% from the previous week.
The contraction in gold’s net-length was not a major surprise to most analysts as the gold prices were unable to hold gains above $1,300 an ounce. During the survey period, gold prices fell to a three-week low below $1,270 an ounce.
“Gold’s frustrating lack of response to weaker stocks and lower bond yields helped trigger a 42k reduction in the net-long, more or less what was added the previous week,” said Ole Hansen, head of commodity strategy at Saxo Bank.
In a recent interview with Kitco News, Afshin Nabavi, head of trading with MKS, said that the lack of speculative interest in gold is the most significant factor holding back the yellow metal.
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