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Hedge funds moving back into gold as Fed nears rate hike endgame

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Hedge funds are betting on July being the last in the US Federal Reserve’s current programme of aggressive rate hikes aimed at bringing inflation under control, and are moving back into the gold market as a result, according to a report by Kitco News. 

Hedge funds are betting on July being the last in the US Federal Reserve’s current programme of aggressive rate hikes aimed at bringing inflation under control and are moving back into the gold market as a result, according to a report by Kitco News. 

The report cites the Commodity Futures Trading Commission’s (CFTC) disaggregated Commitments of Traders report for the week ending 18 July as revealing that money managers increased their speculative gross long positions in Comex gold futures by 23,250 contracts to 147,644, with short positions also falling by 9,625 contracts to 32,326.

According to Kitco, bullish speculative positioning has pushed the gold market to its highest level since March 2022 and it is now net long by some 115,318 contracts. Gold recently rallied to a seven-week high of around $1,980 an ounce but has since fallen back to $1,950.

And despite the increase in bullish sentiment pushing gold to a nearly a 18-month high, speculative positioning is still below levels seen when gold prices hit record highs in 2020.

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