Gold Speculators raised their bullish bets to 17-week high

November 21, 2020

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Gold Futures Sentiment: Updated Data Through: November 17 2020

Gold Large Trader Net Positions:

Gold Non-Commercial Speculator Positions:

Large precious metals speculators boosted their bullish net positions in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

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The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 251,270 contracts in the data reported through November 17th. This was a weekly gain of 11,534 net contracts from the previous week which had a total of 239,736 net contracts.

The week’s net position was the result of the gross bullish position (longs) going up by 11,182 contracts (to a weekly total of 329,698 contracts) while the gross bearish position (shorts) declined by -352 contracts for the week (to a total of 78,428 contracts).

Gold speculators sharply raised their bullish bets this week by the most of the past seven weeks. Previously, bullish bets had fallen for three straight weeks but this week’s turnaround pushed the bullish position to the highest level of the past seventeen weeks. The gold speculator sentiment has continued to be strongly bullish as net positions have remained above the +200,000 contract level for seventy-five straight weeks, dating back to June of 2019.

The large speculators Strength Index level, the current score for traders compared to levels of the past three years, shows that specs are currently at a Bullish level with a score of 73.9 percent.

Speculators are seen as trend followers and usually trade in tandem with the price direction (blue line in above chart). At the extreme levels, specs are very important to watch as they have a tendency to bet the wrong way (that the trend will continue to even more extreme levels).

TRADER TYPE DATA:	SPECULATORS
– Percent of Open Interest Longs:	59.1
– Percent of Open Interest Shorts:	14.1
– Net Position:	251,270
– Gross Longs:	329,698
– Gross Shorts:	78,428
– Long to Short Ratio:	4.2 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct):	73.9
– COT Index Reading (3 Year Range):	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.7

Current Trader Positions as Percent of Open Interest:

Commercial Trader Positions:

The commercial traders position this week came in at a total net position of -294,572 contracts. This was a weekly change of -11,149 contracts from the total net of -283,423 contracts reported the previous week.

The commercials Strength Index level, a score that measures the contract levels of the past three years within a range of 0 to 100, shows that Commercials are currently at a Bearish level with a score of 22.1 percent.

At the extreme levels, commercials are very important to watch as they have a tendency to be correct at the major turning points in price trends.

TRADER TYPE DATA:	COMMERCIALS
– Percent of Open Interest Longs:	19.1
– Percent of Open Interest Shorts:	72.0
– Net Position:	-294,572
– Gross Longs:	106,681
– Gross Shorts:	401,253
– Long to Short Ratio:	0.3 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct):	22.1
– COT Index Reading (3 Year Range):	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.5

Small Trader Positions:

The small traders position this week totaled a net position of 43,302 contracts. This was a weekly change of -385 contracts from the total net of 43,687 contracts reported the previous week.

The small traders Strength Index level shows that smalls are currently at a Bullish-Extreme level with a score of 88.9 percent.

Small traders are less important to watch (in most cases) as their numbers tend to be just a small part of the total trading open interest.

TRADER TYPE DATA:	SMALL TRADERS
– Percent of Open Interest Longs:	11.5
– Percent of Open Interest Shorts:	3.8
– Net Position:	43,302
– Gross Longs:	64,301
– Gross Shorts:	20,999
– Long to Short Ratio:	3.1 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct):	88.9
– COT Index Reading (3 Year Range):	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.4

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

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