Gold selling exhaustion nears as CTA pressure fades – TDS

Gold is showing signs of selling exhaustion, with CTA selling pressure largely behind and discretionary shorts nearing saturation. With key downside triggers well below current levels, positioning points to a potential rebound in the days ahead, TDS' Senior Commodity Strategist Daniel Ghali notes.

CTAs unlikely to sell unless Gold breaks below $3040

"Imminent selling exhaustion in Gold. In nearly every scenario for prices, CTAs will reacquire their recently shed Gold length over the coming week. Active Gold prices now need to break south of $3040/oz to catalyze the next selling program, highlighting a very large margin of safety against the next round of CTA selling activity."

"Chinese ETFs outflows have now also completely subsided as we expected following the largest round of liquidations since May. Although discretionary traders in Comex Gold have indeed covered a notable portion of their short position over the last week, this cohort remains net short today, likely owing to a tactical USD view. Selling exhaustion has returned to Gold markets."