Speculators raised Bullish Gold Positions by 22%

The big speculators increased their bullish positions in gold futures by 22% in the most recent reporting week, according to the Commodity Futures Trading Commission (CFTC), according to Kitco News. Analysts attribute this to corona virus safe haven purchases and expectations that the Federal Reserve will remain dove-like.

The gold price was not only boosted by the purchases of speculative traders on the futures market, but also by ETF traders, said Commerzbank, for example. However, this also means that one could expect price declines if it came to profit-taking.”Despite the fact that it is a rather crowded trade, investors are still long in gold,” said TD Securities.

“Persistent uncertainty surrounding the virus outbreak has kept demand for safe havens alive, but that’s not the only factor responsible for the recent surge in gold prices.””In fact, a recent flattening of the Fed’s yield curve appears to suggest that interest rates need to be cut further, which gives the yellow precious metal another boost.”