Bets on a gold rally by hedge-fund managers and other large speculators dropped the most since April 2009 after the metal traded below a key moving average following the euro’s rebound.
In the week ended July 6, speculative long positions, or bets prices will rise, outnumbered short positions by 209,042 contracts on the Comex in New York, U.S. Commodity Futures Trading Commission data showed today. Net-long positions fell by 35,683 futures contracts, or 15 percent, from a week earlier.
Gold prices fell 3.8 percent from June 29 to July 6 and traded below the 50-day moving average in the three sessions ended July 6. On July 1, the euro surged the most since March 2009 on speculation that Europe’s banking industry may be in better shape that investors estimated, driving down the precious metal.
“It’s not surprising to see a big dent in net longs after the technical damage was done,” said Matt Zeman, a trader at LaSalle Futures Group in Chicago. “A lot of traders use the 50-day moving average. If it breaks under, you’re out.”
Today, gold futures for August delivery rose $13.70, or 1.1 percent, to $1,209.80 an ounce, marking the biggest gain in three weeks.
Net-longs rose to a record 262,331 contracts in November. Gold futures climbed to an all-time high of $1,266.50 on June 21.
Each Friday, the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.