Recent price rises of gold and platinum speculatively driven to a large extent

Gold is trading marginally above the psychologically important $1,200 per troy ounce mark as the new week of trading gets underway. As the CFTC's statistics on the positioning of speculative market participants on the COMEX in New York show, the week to 7 April also saw a strong increase in net long positions. 

Within just two weeks, net longs soared nearly five-fold to 55,700 contracts. This makes it all the more clear that the latest surge in the gold price was largely driven by speculation and is thus on a shaky footing. 

The situation for platinum is similar, net long positions here having been expanded by 60% to 17,100 contracts in the space of the last two weeks, meaning that the sustainability of the recent rise in the platinum price is likewise questionable. 

According to Commerzbank, Friday saw outflows of 2 tons from the gold ETFs, reversing half of the previous day's pronounced inflow. This week it will be two years since the gold price experienced its historic slump. In mid-April 2013, gold shed around 15% or $230 within just two days, starting at a level of $1,565 per troy ounce. Today the price is still a long way off this level. 

Besides low inflation and rising equity markets, the strong US dollar has prevented the gold price from recovering. The gold price in euros is faring better, on the other hand - it is now only 4% below the level it was at prior to the slump.