Gold fell at USD 1540, the lowest in six months. Appetite for riskier assets and the renewed strength of the dollar, have heavily impacted the price of precious metals.
Indeed, several major fund managers have reduced their positions in recent months, due to a return of confidence in the future of the eurozone, where the worst of crisis seems to be over.
According to statistics from the CFTC (Commodity Futures Trading Commission), the long positions in futures and options on gold are at their lowest for more than 4 years. The number of long contracts has fallen by 40% in February to return to 30,000 contracts, the lowest figure since November 2008. Large funds such as Lone Pine Capital, Moore Capital and Scout Capital sold all of their positions on gold in the fourth quarter of 2012. George Soros has closed about USD 100 million of the gold market in the fourth quarter, according to documents sent to securities regulators, which would represent about half of its positions on this metal.
Technically, the situation continues to deteriorate and the trend remains strongly bearish in daily data under USD 1620. In weekly data, an ounce of gold falls to its major support level at USD 153, tested three times since 2011.
Any breakdown of this level could lead to a major consolidation in the direction of USD 1425 and USD 1315. The most aggressive investors may open short positions at the current price whereas others will wait for a weekly close below 1530 dollars.