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GBP/USD peaks near 1.2500, retains gains
GBP/USD neared 1.2500, and currently trades in the 1.2460 region as the US Dollar turned lower on Powell’s comments. Federal Reserve Chairman repeated inflation remains high and mentioned credit stress eases rate hike pressure.
The U.S. Commodity Futures Trading Commission (CFTC) Gold noncommercial net positions report for the week ended August 4, 2020 showed a decrease from the previous week’s $195.8K to $179.8K.
The report released by the CFTC provided detailed information on gold positions held by institutional traders such as hedge funds and money managers. Noncommercial net positions measure the net speculative positions held by large traders, who often act as trend followers and do not take fundamental position in the market.
The CFTC believe that large traders in commodities often act as a barometer of broad commodity market sentiment as a whole. Thus, changes in their aggregate positions may provide insight into the market.
The current report indicates that broadly, gold net noncommercial positions declined by $16K from the previous week. This could suggest that broad market sentiment has shifted from bullish to neutral.
At the same time, gold is still trading at a 5-year high of close to $2,000/ounce. This reflects that even though market sentiment may have shifted to neutral, investors are still confident in gold’s long-term investments potential.
In conclusion, the CFTC report on gold noncommercial net positions indicates that market sentiment towards gold has shifted from bullish to neutral. However, gold prices remain close to their 5-year high, demonstrating the continued optimism in gold in terms of its potential for long-term investments.