Hedge funds and other large speculators increased their net long positions in COMEX gold futures to their highest level in 13 months, according to the Commodity Futures Trading Commission (CFTC).
In its latest Commitment of Traders (COT) report, for the week ended October 9th, the CFTC noted that managed funds raised their net long position to 198,194 contracts. This represented the eighth consecutive weekly increase and the highest level since October 23rd of last year.
While the increased speculation coincided with gold rallying to multi-month highs near $1,800 per ounce earlier this month, the latest data is also a worrisome sign from a contrarian perspective.
Specifically, the data suggests that a great deal of buyers have already accumulated positions in gold and there may not be many left to step in to support the yellow metal in the event of a sell-off. Moreover, based on today’s 1.4% decline to $1,735 per ounce, it appears that is the case.
(For more analysis and commentary on the gold market, visit GoldAlert Pro – http://pro.goldalert.com )
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