Algorithms are going to drive precious metals even higher. Markets expect CTAs to increase their net position in Gold over the next week, in any future price scenario. This reinforces our conviction that the time of caution in gold is over, says Daniel Ghali, Senior Commodities Strategist at TDS.
Gold EFPs have fallen significantly
“The current setup is exceptionally reflexive, given that a weaker broad dollar/weaker US rates may attract additional macro fund buying activity, following significant sell-offs of the extreme position held by this group in the US elections.” .US, while a continued strengthening of the broad dollar may attract physical buying activity associated with hedging depreciation of Asian currencies.”
“The buyers’ strike in physical markets has ended, and we now expect renewed CTA buying activity to be the next catalyst to further extend the rally in flat prices, with algorithms ready to buy between +10% of its size maximum (or 20% of your current position size) and +17% of your maximum size in any price scenario over the next week Macro funds have rebuilt their war chests, and we see no shortage of bullish narratives to avoid. that your capital flow back into the yellow metal, particularly if algorithmic buying pushes prices to new all-time highs.”
“Gold EFPs have fallen significantly, despite continued strength in flat prices. Silver EFPs remain much more stubborn, as we expected, with London markets continuing to point to a shortage underlining our view of a convexity.” “Any additional strength in Gold will likely lift Silver given a historically cheap XAU/XAG ratio, but CTA buying activity in the white metal over the next week will likely kick off the next leg of this rally.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
