Chinese Gold ETF outflows signal holiday-liquidity risks, not trend shift – TDS
|Chinese Gold ETFs recorded their largest outflows in 264 trading sessions, TDS' Senior Commodity Strategist Daniel Ghali notes.
Macro catalysts could reignite Gold rally despite pause
"These outflows were (1) not particularly large, at -80koz and (2) likely related to profit taking ahead of the holidays, but highlight vulnerabilities associated with China's holiday-induced liquidity vacuum. Unfortunately for the bears, these vulnerabilities cannot be exploited without Western speculators outright shorting Gold. Western traders have no scope to sell."
"Macro funds remain largely net flat into a recessionary/stagflationary narrative. CTAs won't sell in any scenario for prices. Gold may well be overbought, but it's under-owned."
"The buying impulse that drove the melt-up may now have subsided, but several catalysts on the horizon could reignite it. Look for signs of Asian currency depreciation, or rising recession/stagflation odds to push on the gas pedal."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.