to the question may be "Not yet". There is also a markedly bullish element to the fundamentals of the market in terms of net central bank purchases, while also for the first time in many years the financial position of some of the major gold miners has been attracting attention to the supply side. Recent bearish sentiment has seen gold touch seven-month lows amid persistent investor selling, as exemplified by ETF and Comex exposure numbers.
CFTC figures for Feb. 19, when the Comex first position gold closed at $1,603.60, showed outright non-commercial and non-reportable long positions at 410 tonnes, a fall of 89 tonnes or 18 percent against the previous week (when gold closed at $1,648.70). This contraction was driven by a heavy increase in outright shorts, which jumped from 297 tonnes to 390 tonnes. Subsequent trading figures suggest that shorts have expanded further.
The major ETFs shed 47 tonnes between Feb. 14 and Feb. 22, with net dollar value of the underlying gold movements through the SPDR, where the majority of the activity was concentrated, amounting to an outflow of almost $2.2 billion over the period.
Asia, meanwhile, is capturing some of the market headlines, with plentiful fresh buying interest coming from China in late February. Turnover on the Shanghai Gold Exchange, for example, soared on the market's return from the New Year holiday celebrations. The exchange posted record turnover of 30 tonnes in the physical contracts on Feb. 18, the first day back, and the daily turnover in the week following the holiday was 21 tonnes, more than twice the volume in the equivalent post-New Year period of 2012. The Hong Kong premium over international prices has been posting 12-month highs, partly reflecting the New Year interest but also pointing to a reasonably robust underlying market.
Activity in India was reported initially to be down on Feb. 20 and 21 as a result of a national strike, but the domestic market perked up later on the 21st in the wake of the price fall, reflecting bargain-hunting, and managed to remain more or less at parity with international prices rather than