Overnight, gold prices have continued to rise to new all-time highs according to TDS Senior Commodity Strategist Daniel Ghali. Despite this increase, Shanghai trader positioning has slightly decreased from its record highs. There is some buying activity in the market, but its source is unknown at the moment. In addition, there have been outflows from broad commodity funds and Chinese Gold ETFs.
While central banks have been purchasing gold, official global central bank flows are at their lowest levels in five years. In Comex Gold, non-commercial ‘directional short’ positioning suggests that there are very few short positions left after recent short covering. Macro fund positioning remains near its historical maximum levels and CTAs are at maximum long positions. There have been minor inflows into popular Western Gold ETFs, as well as signs of risk parity and vol-targeting funds’ releveraging.
The source of the recent buying activity in gold remains unknown, with Shanghai trader positioning slightly decreasing from its record highs. Despite this uncertainty, central banks continue to support the gold market by purchasing the precious metal. However, global central bank flows have been declining and are now at their lowest levels in five years. In Comex Gold, short positions are nearly non-existent after recent short covering.
Macro fund positioning is close to historical maximum levels, indicating strong investor confidence in gold. CTAs have maximized their long positions, potentially indicating further price increases in the future. Despite these positive trends, there have been only minor inflows into popular Western Gold ETFs. Risk parity and vol-targeting funds have started releveraging, indicating a renewed interest in the gold market.
Overall, gold prices have been reaching new all-time highs and the market continues to show signs of strength. Although the source of recent buying activity remains unknown, central banks are continuing to support the gold market through purchases. Despite declining global central bank flows, investor confidence in gold remains high with macro fund positioning close to historical maximum levels. CTAs have also maxed out their long positions, suggesting further price increases in the future. Despite minor inflows into Western Gold ETFs, risk parity and vol-targeting funds are releveraging, indicating a potential uptrend in the gold market.
