Wednesday, March 25, 2015 8:22:25 PM
3 Hours Ago
The gold price rallied on Wednesday after the latest data from the U.S. Commodity Futures Trading Commission (CFTC) shows that gold shorts were at a four-month high just before the Federal Reserve meeting last week.
Bullion has seen a five-day rally, its longest since the start of 2014, following the accommodative comments on monetary policy from Fed Chair Janet Yellen last week. The gold price hit a 2-and-a 1/2 week high on Wednesday.
While the Fed dropped its statement last week that it could be "patient" in waiting to normalize monetary policy, Yellen added that the Fed was not "impatient" either. She referenced the current weakness in inflation and the strength of the U.S. dollar.
Upbeat German sentiment data and weaker-than-expected U.S. durable goods data helped yellow metal futures settle at $1,197 on Wednesday, up $5.60, but gold was also boosted by data revealing that gold shorts, or bets on a price decline, had been aggressively added to positions in recent weeks.
CFTC data covering U.S. trader activity for the first two week of March showed gold shorts at highs not seen since December, setting the stage for the "short-covering rally" that has since followed.
Gross gold shorts reached 15 million ounces in the three weeks to the 17 March, representing 85 percent of the all-time high.
"The considerable increase in gold shorts over a relatively short span of time meant that the risk of a short squeeze was already elevated and the dovish Fed outcome was more than enough to trigger short-covering," Edel Tully, global precious metals strategist at UBS.
Longs, or bets that the asset will rise in value, in gold fell to their lowest levels since mid-November, driven largely by shorts.
Read MoreGold is going to $1,300 by May: BofA technician
"Overall, the latest guidance from the Fed is friendlier to gold versus previous expectations and we anticipate that the recovery would continue towards our one-month target of $1,200 as positioning further corrects from short-term overextended conditions," Tully said.
"Further out, unless a significant catalyst emerges, we maintain our expectation for the market to continue consolidating around these levels, with our three-month target at $1170," she added.
Tully said she expects this week's CFTC report to show a considerable reduction in short positioning and some rebuilding in longs following the March 18 Fed meeting.
Read MoreAre bottom-fishing oil investors complacent?
"Bottom line—the Fed outlook is mildly positive for gold, as an April hike is essentially off the table and policy statements appeared to talk-down the extraordinary dollar strength of late," said commodity analysts led by Aakish Doshi at Citi.
"This lends some much needed support for bullion prices which had prior to the FOMC release declined around 10 percent since late January. But it seems unlikely to prompt sustained medium-term gold price appreciation in our view," Doshi added.
http://www.cnbc.com/id/102534589
Recent CMCL News
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 04/16/2024 06:00:00 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 04/15/2024 06:00:00 AM
- Caledonia Mining Corporation Plc Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 04/10/2024 06:05:00 AM
- Caledonia Mining Corporation Plc: Issue of Securities Pursuant to Long Term Incentive Plan Awards and Issue of New Long Term Incentive Plan Awards • GlobeNewswire Inc. • 04/10/2024 06:05:00 AM
- Caledonia Mining Corporation Plc Blanket Mine Q1 2024 Production • GlobeNewswire Inc. • 04/10/2024 06:00:00 AM
- Caledonia Mining Corporation Plc: Appointment of Chief Operating Officer • GlobeNewswire Inc. • 04/08/2024 06:00:00 AM
- Caledonia declares quarterly dividend • GlobeNewswire Inc. • 03/28/2024 07:03:00 AM
- Caledonia Mining Corporation Plc Results for the Year ended December 31, 2023; Notice of Management Conference Call; Dividend Declaration • GlobeNewswire Inc. • 03/28/2024 07:00:00 AM
- Caledonia Mining Corporation Plc: Notice of Availability of AGM Materials • GlobeNewswire Inc. • 03/27/2024 07:00:00 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 03/26/2024 07:00:00 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 03/25/2024 07:00:00 AM
- Caledonia Mining Corporation Plc: Non-Executive Director Changes • GlobeNewswire Inc. • 03/18/2024 07:00:00 AM
- Caledonia Mining Corporation Plc Trading update for the year ended December 31, 2023 • GlobeNewswire Inc. • 03/04/2024 07:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/30/2024 11:00:08 AM
- Caledonia Mining Corporation Plc: Encouraging results from deep level drilling at Blanket Mine • GlobeNewswire Inc. • 01/30/2024 07:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/23/2024 11:00:14 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 01/23/2024 07:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/12/2024 11:01:05 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/12/2024 11:00:08 AM
- Caledonia Mining Corporation Plc: Issue of Securities Pursuant to Long Term Incentive Plan Awards • GlobeNewswire Inc. • 01/12/2024 07:01:00 AM
- Caledonia Mining Corporation Plc: Blanket Mine Q4 and FY 2023 Production and 2024 Guidance • GlobeNewswire Inc. • 01/12/2024 07:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/04/2024 11:00:09 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 01/04/2024 07:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/03/2024 11:00:08 AM
- Caledonia Mining Corporation Plc: Notification of relevant change to significant shareholder • GlobeNewswire Inc. • 01/03/2024 07:00:00 AM
North Bay Resources Announces Successful Equipment Test at Bishop Gold Mill, Inyo County, California • NBRI • Apr 23, 2024 9:41 AM
Epazz, Inc.: CryObo, Inc. solar Bitcoin operations will issue tokens • EPAZ • Apr 23, 2024 9:20 AM
Avant Technologies Launches Advanced AI Supercomputing Network and Expansive Data Solutions • AVAI • Apr 23, 2024 8:00 AM
BestGrowthStocks.com Issues Comprehensive Analysis of Triller Merger with AGBA Group Holding Limited • AGBA • Apr 22, 2024 1:00 PM
Cannabix Technologies to Present Marijuana Breathalyzer Technology at International Association for Chemical Testing (IACT) Conference in California • BLO • Apr 22, 2024 8:49 AM
Kona Gold Beverages, Inc. Prepares for First Production Run Set to Launch May 17, 2024 • KGKG • Apr 22, 2024 8:30 AM