The gold market has turned bearish

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"Investors cut net length by a very large 6% of open interest as it became very apparent that real rates on the short end of the curve will continue to increase and there was little chance of upside, as nominal policy rates jumped higher and inflation expectations eroded along with the pending economic slump," said analysts at TD Securities.

Analysts have said that the Fed's aggressive stance could push the U.S. into a recession, creating enough demand destruction in commodity markets to cool red-hot inflation pressures. The French bank noted that the entire precious metal complex saw bearish outflows of almost $4.2 billion last week, driven mostly by gold.

Silver's positioning is net short 10,448 contracts, roughly unchanged from the previous week. During the survey period, silver prices dropped below $19.00 an ounce and tested support at $18.00 an ounce. For the first time in four weeks, depressed copper prices attracted some bullish attention from hedge funds.

 

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