Gold struggled to shrug off bearish sentiment yesterday


Gold struggled to shrug off bearish sentiment yesterday, failing to gain much momentum off the back of a weaker dollar. In overnight trade, as the dollar began to strengthen, the complex began to falter. Speculation that Soros Fund Management has sold much of its gold and silver holdings, apparently over the last month, has added to the bearish attitude towards these metals. These concerns are echoed in the most recent CFTC figures which shows sentiment towards gold, and especially silver, appears to be souring. Net speculative length in gold fell 43.1 tonnes, as a result
of 10.4 tonnes in short position being added, and the loss of 32.7 tonnes in speculative longs. The change in silver speculative positions was much more dramatic. Net speculative length tumbled 1,719 tonnes, the largest drop this year, bringing the level to the lowest point since the end of January 2011.

The drop was a result of 854.5 tonnes being withdrawn from noncommercial long positions, with an even greater 865 tonnes added to short holdings. Some opportunistic buying and a marginally weaker dollar, has seen some support for Gold. However, given the current mood and market positioning, the upside for silver, and consequently the rest of the complex, looks limited.
Yesterday’s better-than-expected US vehicle sales numbers, has helped platinum and palladium avoid the extent of the losses experienced by gold and silver. Total vehicles sales for April improved to 13.14m (consensus:13.0m) from 13.06 during the previous month.

Gold support is at $1,523 and $1,511. Resistance is at $1,550 and $1,564.

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