2010-03-09

Gold speculative interest is now rising again


Both gold and silver have seen their speculative interest decline sharply since October last year. While speculative interest is now rising again, the levels in US futures markets are still well below levels seen last year for both these metals. The non-commercial net long position in gold averaged 35.5% last year, reaching a high of 40.2% in October. Currently, non-commercial length for COMEX gold stands at 33.90%. For silver, the average non-commercial length was 19.5% of OI and a high of 30.7%. Currently non-commercial length on COMEX is at $23.2%. For both metals, we see room for a rise in speculative interest.

While we expect more dollar strength, we believe because speculative interest in gold is not overextended yet. Therefore, the gold price could fall less when the dollar appreciates further. As a result, we still favour gold in euros and GBP.

Gold continues to find support at $1,130. Gold support is at $1,128 and $1,121, resistance is at $1,142 and $1,148.

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