Gold was stable on Monday morning in London while the net long fund position increased for the fifth consecutive week, according to US Commodity Futures Trading Commission data.
The spot gold price was little changed from Friday’s close at $1,121.7/1,122.0 per ounce. Trade has ranged from $1,118.0 to $1,125.0 so far.
Demand picked up after China returned to the market following the long weekend there. But with the US market closed for Labor Day, trading today is likely to be muted, market participants noted.
Friday’s US payrolls data failed to allay uncertainty over the prospect of a near-term interest rate rise from the US Federal Reserve.
“The NFP print on Friday continues to weigh upon gold and we may again see USD $1,117 test tonight in London, while on the topside USD $1,130 will be the first point of resistance,” MKS said in a note.
US non-farm payroll employment had increased by 173,000 in August, below the 215,000 forecast, but the unemployment rate fell to 5.1 percent from 5.2 percent in the prior month.
Even though the headline number undershot expectations, there were several positives in the report. The June total was revised to 245,000 from 231,000 and the change for July was revised to 245,000 from 215,000. With these revisions, employment gains in June and July combined were 44,000 more than previously reported.
“In a sense, gold is currently in no-man’s land and investors are understandably hesitant to put on sizeable positions ahead of the FOMC meeting next week,” UBS said.
Meanwhile, the net long fund position (NLFP) in gold increased 1,952 contracts to 72,685 from 70,733 contracts in the week ending September 1, according to the latest CFTC statistics.
While speculators increased their bullish stance for the fifth straight week, the improvement in the spec positioning was essentially the result of short-covering (-9,092 contracts), which was countered by some long liquidation (-7,140 contracts).
“The fact that speculators have failed to increase long positions suggests spec sentiment is weak,” FastMarkets analyst Boris Mikanikrezai said. “Given the weakness in gold prices since August 24, the scope for further short-covering is limited. Should speculators start liquidating their long positions at a faster pace, gold could retest the 2015 low of $1,078 from July 24.”
There were strong outflows in gold ETFs – in the funds tracked by FastMarkets, holdings fell to 1,530.61 tonnes.
Silver holdings also saw strong outflows, falling to 19,117.85 tonnes. The silver price was little changed this morning – it was last at $14.53/14.58.
Platinum at $989/994 increased $2 and palladium at $578/583 climbed $7.
(Editing by Mark Shaw)
The post Gold stable, net long position up for fifth consecutive week appeared first on The Bullion Desk.
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