Gold price: Still 1 in 5 chance of Fed surprise | MINING.com

The likelihood that Federal Reserve will raise rates from near zero where it’s been since December 2008 has now reached more than 80% according Fed Fund futures prices. Higher interest rates boost the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing.

At just over 1.4 million ounces the market is still in its third biggest net short position ever, surpassing bearish positions entered into in July and early August.According to the CFTC’s weekly Commitment of Traders data speculators reversed course last week, albeit with very little conviction. Hedge funds added modestly to long positions – bets that prices will rise – and slightly trimmed short positions.

According to the CFTC’s weekly Commitment of Traders data speculators reversed course last week, albeit with very little conviction. Hedge funds added modestly to long positions – bets that prices will rise – and slightly trimmed short positions.

Chart Graph Gold price nears 6-year lows as hedge funds place massive bearish bets on gold, but no rate hike should spark “aggressive short covering” and a price spike.

Source: Gold price: Still 1 in 5 chance of Fed surprise | MINING.com