Saxo Bank: The decline in gold speculative positions is driven by long positions being closed, with no large short trades observed
Ole Hansen, the head of commodity strategy at Saxo Bank, stated that despite the significant pullback in gold prices, it is a "healthy reaction" to the buying during the U.S. elections. Recently, the net long positions in COMEX gold futures have decreased to a three-month low, and the increase in new short positions is not significant. Hansen pointed out that although long positions have been liquidated, it has not attracted new short interest, and the holdings in gold ETFs have decreased due to lowered expectations for interest rate cuts
According to Zhitong Finance, despite the recent sharp pullback in gold prices, Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that this is a "healthy reaction" to the buying focus on the U.S. election over the past few weeks, which in some cases has led to a softening of demand from physical buyers—who are concerned about the prospects of further pushing gold prices higher. Precious metals, including gold and silver, surged strongly ahead of the U.S. election but fell sharply after the dollar and U.S. Treasury yields soared, forcing prices below key technical support levels.
Hansen added, "The biggest short-term challenge is the excess long positions of speculators in the futures market, a challenge that has now diminished. However, unless geopolitical tensions worsen, the prospect of an immediate return to historical highs seems unlikely, as the outlook for central bank policy divergence supports the dollar."
Additionally, after three weeks of net selling, the net long positions of managed funds in COMEX gold futures decreased by 40,000 contracts to a three-month low of 197,000 contracts. However, it is noteworthy that during the period ending November 12, less than 1,000 contracts of the change were driven by new short positions.
Hansen stated, "In other words, while the need to reduce long positions amid falling prices forced long positions to close, this weakness has not attracted any new willingness to short. Against the backdrop of lowered expectations for interest rate cuts, the holdings of gold-backed exchange-traded funds (ETFs) have also decreased, which makes financing costs relatively high."