Gold: Some buying activity is hitting the tapes – TDS

FXStreet Insights Team FXStreet

Gold prices continue to melt into new all-time highs in the overnight, TDS Senior Commodity Strategist Daniel Ghali notes.

Shanghai trader positioning has edged off its record highs

“Clearly, some buying activity is hitting the tapes, but the source remains off of our radar for now. In fact, visible flows point to modest outflows from broad commodity funds and a continued trend of outflows Chinese Gold ETFs. Shanghai trader positioning has edged off its record highs, with aggregate net positioning for the top traders remaining fairly stable.”

“Certainly, participants feel comfortable knowing that central banks are on the bid, but on a six-month moving average basis, official global central bank flows are now trending towards their lowest levels in five years. In Comex Gold, non-commercial 'directional short' positioning, which accounts for EFP positioning, points to nearly no shorts remaining following recent short covering.”

“Our latest gauge of macro fund positioning remained just a nudge below its maximum historical levels, and CTAs are effectively max long. We only note marginal inflows into popular Western Gold ETFs, and perhaps most notable, signs of risk parity and vol-targeting funds' releveraging.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.