The gold price ticked marginally higher on Monday, though the metal has largely shrugged off news of the first increase to the net long fund position in in six weeks.
Spot gold was last at $1,095.20/1,096.00 per ounce, up $1.80 on the previous session, having traded within an intraday range of $9 so far and just short of the psychologically important $1,100 level.
While the metal is so far in positive territory for the session, it does appear investors have shrugged off news that the net long fund position (NLFP) in gold has increased by 5,435 contracts (or 19 percent) to 29,900 from 24,465 contracts in the week ending August 4, according to the latest CFTC statistics.
The increase in the net length for the first time in six weeks was mainly driven by short-covering (-3,620 contracts) that was further reinforced by long accumulation (+1,815 contracts). The net length is down about 74 percent in the year to date.
“Given that the spec positioning has deteriorated remarkably over the past two months, the gold short trade has likely become overcrowded, which has therefore induced some short-covering. Whether the tide has turned remains uncertain, however,” FastMarkets analyst Boris Mikanikrezai said in a note.
“In the near-term, we would be inclined to think that further short-covering will continue, pushing gold prices higher. Our hypothesis is supported by the lack of downside price action following the release of the July employment report on Friday,” he added.
Indeed, gold is holding up fairly well in light of the latest Us labour-market figures, which make a September increase to interest rates more likely, Commerzbank noted.
The US created 215,000 new jobs in July against consensus of 222,000. Average hourly earnings were as expected at 0.2 percent, as was the unemployment rate at 5.3 percent.
Nonetheless, the dollar is looking marginally weaker at 1.0968 against the euro and all major European indexes have opened in positive territory.
On the downside, holdings in exchange traded funds (ETFs) have continued to fall. Holdings are now down to 1,519 tonnes, a comparably small drop compared to recent figures, but still at 2009 lows.
Silver holdings, however, have increased to 19,252 tonnes, a 3.51 tonne increase. The price of silver is also rising this morning, the metal gained one percent at $14.92/14.97 per ounce and looks like testing $15 in the near-term as it did on Friday.
Platinum and palladium holdings, however, both decreased, despite the recent additions. Nonetheless, both metals are in positive territory this morning – platinum is up $10 at $967/972 per ounce and palladium is up $6 at $601/606 per ounce, having dropped below $600 for the first time in around three years last week.
This morning, economic data out of Japan was mixed with bank lending rising 2.6 percent, the economy watchers sentiment was better than the previous month, but consumer confidence edged lower. In Europe, the EU Sentix investor confidence index was 18.4, lower than forecast, while still to come are the US labour market conditions index, plus FOMC members Stanley Fischer and Dennis Lockhart are speaking.
(Editing by Martin Hayes)
The post Gold makes modest gains but net long position finally increases appeared first on The Bullion Desk.
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