Net long gold positions on US commodity exchange COMEX fell 9% to 63,625 contracts in the week to February 14, Commodity Futures Trading Commission data showed Monday.
It was the first cut in net length for six weeks and reduces bullish positions to a four-week low, but are still up overall around 50% since the start of the year, reflecting gold's strong 2017 performance to date.
Spot gold was priced around $1,235/oz Monday morning, down from Friday's near three-month highs above $1,240/oz, and remains up close to 8% since the start of the year.
Gold has been supported by expectations of increased borrowing in the US following the new administration's plans for greater spending, as well its increasingly erratic policy signals, while political uncertainty in Europe is expected to play a significant role for investors in coming months.
"The question of Greece abandoning the euro could flare up again in the near future because the country has to make a large loan repayment in July," Commerzbank said in its daily note Monday.
Elections are also due this year in France, Germany and the Netherlands, while the UK is expected in March to trigger its decision to quit the European Union.
Investor demand for gold ETFs remains strong, meanwhile. The world's largest gold-backed ETF, SPDR Gold Shares, recorded an inflow of around 4.5 mt in the week to Friday.
The fund, which accounts for over 40% of gold-backed ETF flows, is up over 40 mt in February, reversing a decline of 23 mt in January, according to company data.
Elsewhere, net long silver positions climbed for the seventh consecutive week, up 10% to 72,166 contracts, a five-month high. Silver was holding above $18/oz in European morning trade Monday, down around 8 cents/oz from Friday's three-month highs, in-line with gold.
Platinum positions fell for the first time in six weeks, down 2% to 26,226 net long contracts. Palladium contracts increased for the second week, up 6% to a three-week high of 17,102 net long contracts.
Platinum is trading around $1,000/oz, largely unchanged from Friday. Palladium is priced around $777/oz, also largely unchanged.
