According to the COT (Commitments of Traders) reports provided by the Commodity Futures Trading Commission (CFTC) - for the week ended last Tuesday:
Large speculators (NON-COMMERCIAL) reduced the net position for the purchase of gold contracts by 2.9 thousand contracts to 232.1 thousand. Large speculative players began to reduce their net buy position after increasing it for 4 weeks. The net position began to decline from the highest levels since February 9.
Hedgers (COMMERCIAL) reduced the net position for the sale of gold contracts by 2 thousand contracts to 269.5 thousand. Hedger operators began to reduce the net position for sale also after a 4-week build-up.
Open interest decreased by 4.3 thousand contracts to 679.1 thousand.
The bullish index of large speculators (the ratio of the number of contracts for buying to the number of contracts for selling) fell by 0.22 to 4.00 for the week.
Summary: COT reports on gold reflect the growth of bearish sentiment. After a month-long build-up, traders began to reduce their net position on rising prices. At the same time, the net position began to decline from the levels that were the highest in the last 4 months. Large funds increased gold sales by 6% over the week, taking advantage of the highs in prices for 5 months. The continuation of this trend may contribute to a decline in prices for the precious metal.
Note: COT report data is fundamental and is mainly used for medium and long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade according to the trend. Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend. The net position is the difference between the number of buy and sell contracts (the green line on the chart is the net position of large speculators; the blue line is the net position of hedgers). Open interest is the sum of all open positions in the market.