(Kitco News) – Sentiment in the gold market has rapidly deteriorated as hedge funds have increased their bearish bets in the marketplace bringing speculative positioning close to neutral. However, some analysts are optimistic that the rising bearish sentiment in the marketplace could signal a capitulation move, and prices might be close to a bottom.
“Last week’s selloff helped to remove a lot of complacent investors in gold,” said Phillip Streible, chief market strategist at Blue Line Futures. “A lot of fat has been trimmed and only the lean longs are left. There is not much more room for gold to go down.”
The CFTC disaggregated Commitments of Traders report for the week ending July 5 showed money managers lowered their speculative gross long positions in Comex gold futures by 7,378 contracts to 103,472. At the same time, short positions rose by 11,690 contracts to 86,438.
Gold’s net length now stands at 17,034 contracts, down more than 52% from the previous week. Gold’s net length is at a three-year low. During the survey period, gold prices dropped below critical support levels, eventually testing long-term support at $1,730 an ounce.
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