The algae will push the precious metals even further. Markets expect CTAs to add to their net length in gold over the next week, in any future price scenario. “This reinforces our belief that the time for caution in gold is over,” notes Daniel Ghaly, chief commodities strategist at TDS.
Gold-plated EFPs have declined significantly
“The current situation is exceptionally reflective, given that broad-based dollar weakness/weak US interest rates could attract more macro fund buying activity, following significant divestments from extreme sizing held by this group in the US election, while… Continued strengthening in the broad dollar could attract physical buying activity associated with depreciation hedges of the Asian currency.
“The buyer’s strike in physical markets has ended, and we now expect renewed CTA buying activity to be the next catalyst to extend the rally in fixed prices further, with algorithms set to buy between +10% of their maximum volume (or 20% of their maximum volume) current position) and +17% of its maximum volume in any price scenario over the next week, macro funds have rebuilt their war chests, and we see no shortage of bullish narratives that could prevent their capital from flowing back into the metal Yellow, especially since purchases will push prices to all-time highs.”
“Gold FEPs have fallen significantly, despite continued firm price strength. Silver FEPs remain much more stubborn, as we expected, with London markets continuing to indicate distress confirming our bullish convexity view.” Any further strength in gold/silver is likely to rise given the historically cheap XAU/XAG ratio, but CTA buying activity in the white metal over the next week will likely initiate the next phase of this rally.
adxpro.online