Gold net long positions rise to $194K as speculators turn bullish

Speculators boosted net long gold positions to $194,000 in the week ending July 3, up from $181,300 the prior period, according to the Commodity Futures Trading Commission's Commitments of Traders report.

The 7 percent increase in net length reflects growing bullish conviction among hedge funds and commodity trading advisers as spot gold held above $4,100 an ounce, data from the CFTC shows. The previous week's reading of $181,300 had marked a multi-week low as prices corrected from the January all-time high.

Spot gold traded at $4,165.06 on Monday, up 24.89 percent from a year earlier, after recovering from a June low near $3,900. The metal's 52-week range spans $3,247.86 to $5,595.42, with the record high set on Jan. 29. COMEX gold inventories have drawn down in recent weeks, adding a physical-market tailwind to the speculative bid.

The positioning data aligns with the broader macro backdrop of a weaker US dollar and cooling labor market. Nonfarm payrolls rose by just 57,000 in June, well below consensus, while the unemployment rate held at 4.2 percent. Those figures, combined with Federal Reserve Chair Kevin Warsh's remarks that inflation risks had eased, pushed the dollar lower and supported gold's rebound from the $4,000 support level.

Gold's rally from the June low of $3,941.87 to above $4,100 represents a gain of roughly 5.7 percent in two weeks. The metal remains 25.6 percent below its January all-time high of $5,595.42, a gap that leaves room for debate between bulls who see further upside on rate-cut expectations and bears who flag the risk of a hawkish Fed pivot.

The next catalyst for gold prices is the July US consumer price index release on July 16, which will test whether the disinflation trend remains intact. A softer reading could reinforce the case for rate cuts and push gold toward the $4,310 resistance level identified by technical analysts.

This article is for informational purposes only and does not constitute investment advice.