Algos are going to propel precious metals further. Markets expect CTAs will add to their net length in Gold over the coming week, in any scenario for future prices. This bolsters our conviction that the time for caution in gold has ended, TDS' Senior Commodity Strategist Daniel Ghali notes.
Gold EFPs have significantly slumped
"The current set-up is exceptionally reflexive, given that a weaker broad dollar/weaker US rates can attract additional macro fund buying activity, following significant liquidations from the extreme position sizing held by this cohort into US elections, whereas a continued strengthening in the broad dollar can attract physical buying activity associated with Asian currency depreciation hedges."
"The buyer's strike in physical markets has ended, and we now expect renewed CTA buying activity will be the next catalyst to extend the rally in flat prices further, with algos set to buy between +10% of their max size (or 20% of their current position size) and +17% of their max size in any scenario for prices over the coming week. Macro funds have rebuilt their war chests, and we see no shortage of bullish narratives that can keep their capital from flowing back into the yellow metal, particularly should algo buying push prices into new all-time highs."
"Gold EFPs have significantly slumped, despite continued strength in flat prices. Silver EFPs remain far more stubborn, as we expected, with London markets continuing to point to tightness underscoring our view for explosive upside convexity. Any further strength in Gold is likely to lift Silver given a historically cheap XAU/XAG ratio, but CTA buying activity in the white metal over the coming week will likely kick off the next leg of this rally."
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD consolidates gains below 1.1400 on weaker US Dollar
EUR/USD consolidates its recovery gains below 1.1400 in early Europe on Monday. Upbeat risk sentiment on Trump's tairff concession news fails to lift the US Dollar, supporting the pair. US-China trade headlines will continue to dominate ahead of Fedspeak.
GBP/USD holds above 1.3100 as USD sellers refuse to give up
GBP/USD preserves its bullish momentum and regains the 1.3100 mark in the European morning on Monday. The sustained US Dollar weakness suggests that the path of least resistance for the pair remains to the upside. US-China trade updates remain in focus.
Gold price extends its consolidative price move near record high; rising US-China trade tensions favor bulls
Gold price trades with a mild negative bias just below a fresh all-time peak touched during the Asian session on Monday as bulls pause for a breather amid slightly overbought conditions on the daily chart. Furthermore, a further recovery in the global risk sentiment contributes to capping the upside for the commodity.
TRUMP token leads $906 million in unlocks this week with over $330 million release
According to Tokenomist, 15 altcoins will unlock more than $5 million each in the next 7 days. Wu Blockchain data shows that the total unlocked value exceeds $906 million, of which the TRUMP token will unlock more than $330 million.
Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.