Gold Market - A Big Change In The Making

London (Apr 2)  In my last week's article on gold, I made the following summary:

"I do not think that gold prices are ahead of another selling wave. However, due to high uncertainty about the direction the gold prices are heading for, I would bet on stable gold prices in the nearest future."

It looks like gold traders shared my opinion, and over the last week, the prices of gold were relatively stable going up from $1,243.7 on March 24 to 1,247.3 on March 31 (an increase of 0.3%).

However, according to the last Commitments of Traders (COT) report, dated March 28, precious metals traders became more bullish on gold/silver prices. The table below delivers a short summary of the last developments on gold/silver futures markets and two futures markets in some way related to precious metals:

Source: Simple Digressions and the COT data

Gold and silver

Firstly, net long positions held by big speculators (mainly hedge funds) went up strongly over the last week:

•Gold futures speculators increased their net long positions by 21.6 thousand contracts

•Silver futures speculators increased their net long positions by 11.6 thousand contracts

Despite these positive figures, the big picture of the gold futures market is still indicative of an initial phase of a bull cycle.

Source: SeekingA;pha