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Bearish Outlook on Gold Grips the Market

Meera Shawn

Bearish Outlook on Gold Grips the Market

(Continued from Prior Part)

Bearish outlook

According to the latest Commitments of Traders data released by the CFTC (Commodity Futures Trading Commission), gold futures traded by large speculators and hedge funds totaled a net long position of 68,000 contracts as of November 10, 2015.

A weekly change shorting 48,000 contracts from the previous week’s total of 116,000 was encountered. This shows that money is flowing out of gold futures as of last week. It most likely seems that the bearish outlook on the commodity is growing in the market.

Gold futures have jumped 9.6% on a 30-day-trailing basis. Silver has fallen 12.1% on a 30-day-trailing basis.

Mining companies and ETFs see falls

The bearish outlook for gold most likely has its backing in the tentative rate hike anticipated before the end of 2015. ETFs such as the Sprott Gold Miners ETF (SGDM) and the Market Vectors Gold Miners ETF (GDXJ) have seen falls in price of 19.1% and 17.4%, respectively.

Mining companies that have followed the same route include New Gold (NGD), AuRico Gold (AUQ), and Gold Fields (GFI). These three companies make up 6.8% of the Market Vectors Gold Miners ETF (GDX). GDX has fallen 20.2% on a 30-day-trailing basis.

Recently in the precious metals market, Singapore has emerged as a major trading center. The bullion retailer Silver Bullion has put forward its optimistic view of Singapore, as it is seen as a secure jurisdiction by investors for storing their precious metals.

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