Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here! Although the precious metal is in a solid uptrend, some analysts say that the gains could be more fragile than it appears as the initial drive was driven primarily by short covering, according to the latest data from the Commodity Futures Trading Commission .
Gold's net short positioning now stands at 16,346 contracts, up nearly 51% from the previous week. Although the latest report shows sentiment is still bearish, it shifted considerably from its recent four-year highs. Commodity analysts at Commerzbank also said they suspect sentiment has shifted to the bullish side as prices have rallied more than 4% from last Tuesday.
Hansen also noted that sentiment in the futures market has shifted, but investors are generally hesitant to jump into gold as demand for gold-back exchange-traded funds remains lackluster. He added that gold bulls need to keep an eye on this sector. Commodity analysts at TD Securities said that they see the move in gold as a short squeeze adding risks to their current short position.
The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures rose by 2,851 contracts to 38,876. At the same time, short positions fell by 11,976 contracts to 29,484Silver's net length stands at 9,392 contracts. Sentiment turned bullish after two weeks in bearish territory.