Gold market: is the big sale still to come?

Gold price -5% in one week

The gold price got under the wheel last week. The gold ounce started the weekend at a discount of 3.5 percent at $ 1,586. The euro gold price fell 5 percent compared to the previous week to 1,438 euros (FOREX rates in each case). Have we affected the course turbulence on the positions of the largest groups of traders on the US commodity futures exchange COMEX?

CoT data goldThe current CoT data as of February 24, 2020 show the following changes. The net short position of the “Commercials” decreased by 2.5 percent compared to the previous week to 375,621 contracts. The “swap dealers” subgroup had the largest share with a 6.4 percent decline in net sales to 211,966 contracts. On the other hand, the net long position of the “big speculators” fell by 5 percent to 335,865 contracts.

                                                                                                               

Open interest

Open interest, the sum of all open gold contracts on COMEX, rose 2.46 percent to 732,917 contacts compared to the previous week. That was a 5-week high in the weekly CoT data. By the close of trading on yesterday, the price dropped 4 percent to 701,001 contracts.

 

Classification

The dramatic price trend for the gold price is basically not reflected in the latest data from the US futures market. The net positions remained at a very high level on Tuesday. More importantly, the open interest did not decrease to the extent that one could speak of an escape of the traders from the gold market until Friday. If the price trend from last week continues and the CME Group may also increase the gold margins, then the US futures market could put considerable pressure on precious metal prices.