Pace of Gold ETF outflows slowing, technical strategy bullish: Barclays
Gold exchange traded funds (ETFs) witnessed largest daily inflow on Friday (23 August) at 5.8 tons, the highest since January 1, 2013. However, month-to-date flows remain negative at 17 tons. There are indications that the pace of gold ETF outflows are slowing and this has reduced the number of loss making ETFs, according to a weekly review by Barclays Research.
The latest CFTC data showed net non-commercial positions in Comex gold rose by 6.5k lots driven in part by continued short covering activity (3.6k lots), as well as the establishment of fresh longs. Gross short positions are now at their lowest since April, suggesting the scope for further aggressive short covering may slow. However, following the weaker-than-expected US new home sales, it will be key to track if sentiment is changing toward gold, and fresh longs continue to build.