Gold futures speculators have maintained net long positions relative to open interest at their highest levels since 2020, a pattern established in mid-March and persisting with little change, according to JPMorgan’s data.
Momentum indicators for reached extreme levels on March 8th, March 11th, again in mid-April, and most recently on May 20th.
These peaks in momentum have been followed by retracements, suggesting that momentum traders may be engaging in mean-reversion or profit-taking activities after these spikes.
The significant rise in net long positions began in early March, with momentum signals indicating a sharp increase. This surge in speculative interest in gold futures was first observed reaching a peak on March 8th, followed by another high point on March 11th.
The pattern of elevated speculative positioning has continued since then, indicating sustained interest in the gold market from traders.
The report also notes that the momentum signals, which track the speed and change of price movements, again signaled extreme levels in mid-April.
Such signals are typically used by traders to gauge whether an asset is overbought or oversold and can indicate potential reversals in market trends.
The most recent instance of these extreme momentum levels was recorded on May 20th. Each occurrence of heightened momentum has been succeeded by a pullback in the market, which aligns with the behavior of traders taking profits or re-balancing their positions in response to the market’s swift moves.
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