According to the Commodity Futures Trading Commission (CFTC) latest data, gold supporters have taken a defensive position after hedge funds increased their speculative long positions before the Fed meeting.
The latest CFTC trader commitment report for the week showed that financial managers increased their speculative long positions in COMEX gold futures by 20,833 contracts, reporting to 140,640. At the same time, short positions declined by 8,749 contracts to 39,265.
Gold's current net length is 101,375 contracts, which is 41% more than in the previous week. The gold bears were outmatched last week as market volatility and geopolitical uncertainty pushed prices to a two-month high above $1,850 an ounce.
Investors began to wonder if the Fed would soften its tone since stock markets look weak and the increase in interest rates is already overdue. But to the disappointment of the gold bulls, Fed Chairman Powell chose a hawkish tone instead of calming the market. Therefore, the precious metals market has to struggle to attract capital.
In the silver market, the mood of investors is slightly different as prices are driven by money managers covering their short deals.
The disaggregated report showed that speculative long positions in COMEX silver futures dropped by 1,521 contracts to 51,622. At the same time, short positions also fell by 5,224 contracts to 24,676.
Silver has a net length of 27,419 contracts, which is almost 16% more than in the previous week.
And although silver prices remain extremely volatile, many analysts are optimistic about the precious metal. They expect that industrial demand will remain high until the end of 2022, as the desire for more environmentally friendly energy technologies increases.
At the same time, many analysts see significant potential in the current conditions for non-ferrous metals such as copper, even though short-term speculative interest remains dull.
Copper's disaggregated report showed that speculative long positions in COMEX's high-quality copper futures fell 960 contracts to 60,854. At the same time, short positions decreased by 1,334 contracts to 32,690.
It currently has a net length of 28,164 contracts, which is 1% more than the previous week. During the study period, copper prices continued to maintain around $4.40 per pound.