Net long gold positions on US commodities exchange COMEX fell 31% to 65,868 contracts in the week ended May 16, Commodity Futures Trading Commission data showed Monday.
It was the third straight week that bullish positions on the US commodity exchange declined, having fallen around 75% from the end of April to their lowest level in two months.
Spot gold was priced around $1,255/oz Monday, up around $5 from Friday's close, having recovered last week from two-month lows below $1,220/oz on a return to safe-haven demand amid falling stock markets and political uncertainty in the US.
"The withdrawal of speculative financial investors has no longer had any negative impact on the gold price of late," Commerzbank said in a note Monday.
"On the contrary, the price actually climbed by $16/oz in the last reporting week, which points to robust physical demand."
A number of analysts highlighted a sharp rise last week in the US volatility index, VIX, which gauges fluctuations in the S&P 500, to highlight market volatility, and therefore uncertainty. The index had fallen to decade lows this year as stock markets hit record highs, at its lowest level since 1993 as recently as just two weeks ago.
At the same time, investor demand for gold exchange-traded funds has remain subdued.
The world's largest gold-backed ETF, SPDR Gold Shares, is down around 1 mt in the week to Friday, having fallen around 3 mt so far in May.
The fund, which accounts for up to 50% of gold-backed ETF assets under management, rose just over 20 mt in April after shedding around 10 mt in March. It is up around 40 mt in the year to date.
Elsewhere, net long silver positions declined for the fifth consecutive week, down 46% to 17,847 contracts, its lowest bullish position in 16 months.
Silver was trading around $16.95/oz Monday, up just over 10 cents from Friday, in line with gold.
Platinum positions reduced their net short position by around 20% to 8,590 contracts, having been in negative territory for the last three weeks.
Platinum was priced around $940/oz Monday, largely unchanged from Friday.
Palladium positions fell 4.5% to 22,073 net long contracts, a three-week low. Palladium was priced around $760/oz Monday, up around $1.50 from Friday.
