27.04.202112:05 Forex Analysis & Reviews: Sharp decline in 10-year US bond yields prompted hedge funds to return to the gold market

The Commodity Futures Trading Commission (CFTC) said the recent decline in 10-year US bond yields prompted hedge funds and managers to return to the gold market.

But this renewed speculative bullish interest is not enough for the prices to go above $ 1,800.

In fact, although most analysts remain optimistic about gold, some believe that it will turn down because of rising inflation.

The latest CFTC Commitment of Traders (COT) report indicated that financial managers increased their speculative long positions on Comex by 4,773 contracts to 116,843 contracts. At the same time, short positions increased by 2,156 contracts to 60,419 contracts.

Gold's net length is $ 56,424, which is little change from the previous week. And during the reporting period, price has risen to a two-month high, hitting $ 1,800 an ounce.

Analysts at TD Securities said they are monitoring the movement around this level, claiming that soon, the yellow metal will trade higher than it. However, it will not happen without volatility.

Eugen Weinberg, head of commodity research at Commerzbank, also said the same, but declared that this will not happen until at least the fourth quarter this year. Nevertheless, investors will continue to view gold as an important long-term inflation hedge, and the improving economic data will continue to support the current economic recovery and provide additional boost to both US bond and dollar yields.

Weinberg also said he is observing the stock markets to determine gold's next move. He explained that if the stock markets continue to decline, then investors can turn to gold as a safe-haven asset.

As for silver, it continues to have a very positive outlook, especially since the latest COT report said long positions on Comex rose 6,069 contracts to 61,979 contracts, while short positions increased by only 649 contracts to 27,992 contracts.

Silver's net length is 33,987 contracts, up nearly 19% from the previous week.

And during the reporting period, price exceeded $ 26, outperforming gold.

As a result, many analysts are more bullish on silver, expecting the improving economy and ongoing transformation to green energy to provide strong support for the metal.