Who is the biggest short seller of gold price? Hedge fund divisions intensify

category:Finance
 Who is the biggest short seller of gold price? Hedge fund divisions intensify


According to the latest data released by the U.S. Commodity Futures Commission (CFTC), the net gold short positions of gold mining traders in the week ended August 4 surged by 963700 ounces from the previous week, the largest weekly short selling range since July.

In his view, whether the joint efforts of gold mining traders and speculative capital can keep gold prices down depends on the face of asset management institutions such as hedge funds.

At present, the hedge fund community is increasingly divided on the future trend of gold price. Many conservative Multi Strategy hedge funds are worried about the lack of follow-up buying in the gold market, unable to support the current gold price; there are also aggressive event driven hedge funds that believe that global monetary easing and geopolitical risks will eventually make the gold price even higher. Bob haberkorn points out. However, the key factor that affects the final outcome of the long short game falls on the US dollar.

A number of Wall Street hedge fund managers disclosed to reporters that the negative correlation between gold price and US dollar suddenly increased to about 90% in the past month, which means that there are still a lot of quantitative investment funds behind this round of gold price surge. If the current US dollar index rebounds from a year-on-year low of 92.51, the selling of these quantitative investment funds will undoubtedly pose a new huge pressure on the gold price.

It is worth noting that the negative correlation between gold and the US dollar index has become increasingly close during the past month when gold prices hit new highs. Picture vision China

Retail profit taking leading gold price down?

In the face of last weeks large gold mining traders short of gold futures hedging, many gold industry insiders are not surprised.

However, the short selling of gold mining traders may not be the biggest behind the trigger of gold price correction, because the continuous increase of gold ETF positions last week largely offset the downward pressure of gold price.

It is mainly retail funds that have a substantial impact on the fall of gold prices. Wang Jinlong, the global founder and CEO of Haitou, pointed out to reporters. Before this, many retail investors bought gold ETF or Comex gold futures long positions in the face of global monetary easing and weak U.S. economic recovery, and bet on the rise of gold price. On Friday, the good US non farm employment data suddenly boosted the market risk appetite and the US dollar rebound. They saw that the gold price continued to rise and narrowed the space. They sold gold ETF and gold futures long positions to profit and leave the market.

In Wang Jinlongs view, compared with retail investors, the current gold positions of institutional investors are relatively stable - general positions account for 3% - 5%, and they are not likely to significantly reduce their positions due to changes in market investment sentiment.

David meger told reporters that although the rapid inflow and outflow of retail funds led to the rise and fall of gold price, what really affected the rise and fall of gold price valuation still depends on the next operation of asset management institutions such as hedge funds.

According to the latest CFTC data, in the face of gold prices hitting new highs last week, some hedge funds have also moved the idea of arbitrage every high profit. In the week ended August 4, hedge funds had 103600 ounces less net gold long positions than the previous week.

It is worth noting that the gold arbitrage positions held by hedge funds suddenly dropped by 1196300 ounces in the week, which means that a large number of hedge funds have shifted their gold investment strategy from hedging to gambling on the unilateral rise and fall of gold price.

A number of gold brokers disclosed to reporters that most of the hedge funds that convert arbitrage positions into short positions in gold prices are short positions, because they are worried that the dollar index will start to rebound after a sharp drop of 8%, prompting the gold price to continue to fall.

Arbitrage logic of quantitative investment funds

In the past, the negative correlation between the two basically remained at 60% - 80%, but in the past month, this value has jumped to about 90% A Wall Street hedge fund manager who recently increased gold positions told reporters. Behind this is a large number of quantitative investment fund funds pouring into the gold futures market - arbitrage against the fall of the US dollar.

In his view, this is also in line with the main investment logic of current institutions bullish on gold prices - as the US Federal Reserve continues to increase QE measures, increasing US dollar liquidity, and the continued depreciation of the US dollar will promote the continued rise of gold prices in US dollars. Even the latest report issued by Goldman Sachs points out that the recent sharp fall in the US dollar will directly shake the US dollars position as the global reserve currency, making gold expected to regain its ultimate currency status.

A number of gold brokers said that the price of gold in the past two trading days has fallen, which is precisely affected by the selling of quantitative investment funds. However, since the scale of quantitative investment funds (buying gold ETFs or gold futures long positions) that have poured into the gold market before is as high as $2-3 billion, if the rebound of the US dollar causes them to continue to sell their gold positions substantially, it is still uncertain whether the retail investors and hedge funds who are still bullish on the gold price will have enough funds to take over the gold price to stabilize the gold price. After all, the main bullish capital of gold has slowed down the pace of additional position allocation due to the continuous rise of gold price. For example, according to the data released by the world gold association, in the first half of this year, central banks all over the world increased their holdings of 233 tons of gold, down about 39% year-on-year; at the same time, hedge funds and other asset management institutions are quietly increasing their profit taking. As a matter of fact, the sentiment of profit taking among retail investors is rising day by day. Bob haberkorn revealed that because most retail investors are speculating in gold in the same way as they were in the U.S. stock market before, they pushed up the price of gold all the way through continuous buying, and once the price fell, they quickly made a profit and left the market. Source: Yang Qian, editor in charge of economic report in the 21st century_ NF4425

A number of gold brokers said that the price of gold in the past two trading days has fallen, which is precisely affected by the selling of quantitative investment funds. However, since the scale of quantitative investment funds (buying gold ETFs or gold futures long positions) that have poured into the gold market before is as high as $2-3 billion, if the rebound of the US dollar causes them to continue to sell their gold positions substantially, it is still uncertain whether the retail investors and hedge funds who are still bullish on the gold price will have enough funds to take over the gold price to stabilize the gold price.

After all, the main bullish capital of gold has slowed down the pace of additional position allocation due to the continuous rise of gold price. For example, according to the data released by the world gold association, in the first half of this year, central banks all over the world increased their holdings of 233 tons of gold, down about 39% year-on-year; at the same time, hedge funds and other asset management institutions are quietly increasing their profit taking.

As a matter of fact, the sentiment of profit taking among retail investors is rising day by day. Bob haberkorn revealed that because most retail investors are speculating in gold in the same way as they were in the U.S. stock market before, they pushed up the price of gold all the way through continuous buying, and once the price fell, they quickly made a profit and left the market.