Hedge funds continue to reduce their bearish positions on gold. Economists have noted that bullish sentiment should improve if gold prices surpass the $1,980 per ounce mark.
A detailed report from the CFTC on trader commitments showed that capital managers reduced their speculative long positions in Comex gold futures by 387 contracts to a total of 120,222 contracts. Short positions also decreased by 11,510 contracts to 69,857.
According to most analysts, silver and gold are currently trading in a neutral range as rising bond yields and a relatively stable U.S. dollar continue to dominate.
Nicky Shiels, head of metals strategy at MKS PAMP, said investors have a net long position in precious metals worth around $30 billion. However, according to updated data, there are currently only 50,365 net long positions in the gold market.
Despite the ongoing closure of short positions, gold prices have yet to reach the $1,950 per ounce level.
Although gold has been relatively stable throughout 2023, high inflation forces the Federal Reserve to maintain a higher and long-term monetary policy, which creates additional challenges for the precious metal.
While gold has been relatively stable throughout 2023, some analysts argue that as long as high inflation and near-year-high oil prices persist, this will force the Federal Reserve to maintain a higher and long-term monetary policy, creating additional hurdles for gold. Many economists believe that before gold breaks out of its trading range above $1,980 per ounce, it may confidently test the $1,900 per ounce level.
According to TD analysts, since oil prices have reached highs not seen since November 2022, and OPEC+ has extended supply cuts until the end of 2023, combined with the U.S. economy not slowing down and rising U.S. dollar rates, this has contributed to the decline in gold. These events, coupled with high energy costs, could prompt the Federal Reserve to raise rates multiple times, which could indeed push gold prices down to $1,900 per ounce.
