Goldman Sachs Analyzes Reasons for Gold Price Decline as Speculative Funds Liquidate Positions

Goldman Sachs has analyzed that the main reason for the recent continuous decline in gold prices is the large-scale liquidation of speculative funds, rather than changes in real interest rates. Data from the U.S. Commodity Futures Trading Commission shows that from October 20 to 27, speculative traders net sold approximately $8 billion in gold positions, with $5.2 billion coming from long position liquidations and $2.8 billion from new short positions. Since September 22, the gold market has seen a net outflow of speculative funds for five consecutive weeks, totaling $19.5 billion. Goldman Sachs pointed out that during the period from October 20 to 27, about 95% of the outflow came from "other traders" and non-reporting traders. As of October 27, these investors' long positions were still above the median of the past two years, indicating that there is still a risk of further liquidation. From October 27 to 30, gold fell another 4.3%, and the options market saw a significant increase in bearish bets and downside hedging demand, indicating that short-term bearish sentiment in the market continues to intensify.