“For the week ending September 25, money managers increased their speculative gross long positions in Comex gold futures by 609 contracts to 98,513, while short positions increased by 1,823 contracts to 182,190. This means that gold’s net short position is 83,677 contracts,” according to CFRA Research. “The gold market could be poised for a short-covering rally, as investors are likely to start closing out their record level of short positions, given gold’s resilience to not break below key levels of support.”
Importantly, gold prices have recently stayed above the mid-August lows and a move further above $1,200 per ounce could trigger more buying.
“But prices have managed to stay above a 1-1/2-year low of $1,059.96 hit mid-August, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices,” according to Reuters.
For more information on the gold market, visit our gold category.
Tom Lydon’s clients own shares of GLD.