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The CFTC disaggregated Commitments of Traders report for the week ending Sept. 20 showed money managers dropped their speculative gross long positions in Comex gold futures by 1,756 contracts to 78,544. At the same time, short positions rose by 16,602 contracts to 115,239. Analysts note that hedge funds increased their short positioning ahead of the Federal Reserve's September monetary policy meeting. As expected, the U.S. central bank raised interest rates by 75 basis points. However, the committee was more hawkish than expected as it lowered its growth forecast and signaled that rates could rise as high as 4.6%, peaking in 2023.
Analysts also note that the sentiment in futures markets is also reflected in another paper market: gold-backed exchange-traded products. SocGen said that 15.7 tonnes of gold flowed out of ETFs during the survey period last week,"the largest outflow seen for any given 7-day period since July 2022." Although investors are outright bearish on gold, there is slightly more hesitation within silver as hedge funds have lowered their overall exposure to the precious metal.
During the survey period, silver prices were unable to break above resistance at $20 an ounce and solid selling pressure pushed prices below support at $19.00.Not only is silver suffering as a monetary metal, but growing recession fears continue to weigh on industrial demand.
Source: Loan Digest (loandigest.net)
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