Speculative net long positions in gold fall to record-low

Following a marathon meeting, Eurozone heads of state and government agreed with Greek Prime Minister Tsipras this morning on the commencement of negotiations of a third aid programme for the highly-indebted country. Although many points have yet to be resolved, gold responded to the news by falling just shy of 1% to $1,155 per troy ounce. 

Although gold in euro terms dipped briefly to a six-month low of €1,034, a firm US dollar has allowed it to recover somewhat again. The fall in the price of gold at the beginning of last week to below the $1,150 level was accompanied not only by an above-average volume of trading but also by a further withdrawal on the part of speculative financial investors, as the CFTC's statistics that were published on Friday evening reveal. 

They show that net long positions in gold were reduced to just 2,100 contracts in the week to 7 July putting them at their lowest level since the data series began in June 2006. At the same time, speculative short positions were increased to a new record level of well in excess of 100,000 contracts. Clearly, speculative market participants are more convinced than ever that Greece will be "rescued", says Commerzbank.