According to the CFTC weekly report (W/E Dec. 11), gold prices continued to catch a bid as money managers added to their net length after Fed Kaplan flagged risks from slowing global growth, along with the fading tailwinds of US fiscal stimulus and headwinds from trade uncertainty.
Key Quotes
“These factors all contributed to helping gold break $1,240/oz resistance, which prompted many to aggressively cover their shorts. That being said, while equities have increasingly reflected fears that stocks will no longer remain a one-way bet, speculators have continued to prefer liquidating their gold longs rather than increasing their positions for the time being.”
“The announcement of a trade-truce between the US and China at the G20 meeting, the release of Huawei's CFO, and Chinese steps towards removing retaliatory tariffs and purchasing more US soybeans were not enough to convince speculators to grow their convictions in copper. Instead, specs mostly opted to sit on their hands and keep their powder dry, but some liquidated their longs with prices near $6,200/t. We reiterate that we see a soft floor in copper, and we estimate that prices at current levels suggest that CTAs are set to significantly add to their shorts in the coming days. This could particularly weigh on prices next week as discretionary traders remain on the sidelines, while liquidity typically remains light in the final weeks of December.”
“Even as OPEC+ agreed to cut some 1.2m bpd from global crude supply and as armed groups have taken control of Libya's largest oil field, which could significantly contribute towards tightening the market, speculators added more shorts than longs and decreased their net length in WTI crude oil. The market has grown increasingly worried about global growth — a factor that is removing urgency for the bulls to pull the trigger on adding to their length. We think the market will now need to see a trend of drawing inventories before convictions towards higher prices grow.”
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 holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD rises to near 1.2550 due to dovish sentiment surrounding Fed
GBP/USD continues its winning streak for the fourth consecutive day, trading around 1.2550 during the Asian trading hours on Monday. The appreciation of the pair could be attributed to the recalibrated expectations for the Fed's interest rate cuts in 2024 following the release of lower-than-expected US jobs data.
Gold price rebounds on downbeat NFP data, softer US Dollar
Gold price snaps the two-day losing streak during the Asian session on Monday. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Federal Reserve. This, in turn, has dragged the US Dollar lower and lifted the USD-denominated gold.
Bitcoin Cash could become a Cardano partnerchain as 66% of 11.3K voters say “Aye”
Bitcoin Cash is the current mania in the Cardano ecosystem following a proposal by the network’s executive inviting the public to vote on X, about a possible integration.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.