Markets are actually pricing in a coin flip on a 50bp or 25bp minimize by the US Federal Reserve (Fed), however greater than 175bps of cuts by March has already attracted large positions into Gold. This explains the tepid response to the US Nonfarm Payrolls knowledge, TDS Senior Commodity Strategist Daniel Ghali notes.
Gold stays close to all-time highs
“We reiterate that macro fund positioning is at ranges solely matched by the Brexit referendum in 2016, the ‘stealth QE’ narrative in 2019, or the height panic of the Covid-19 disaster in March 2020. Excessive positioning from this cohort has traditionally marked notable native highs in Gold costs and subsequent drawdowns which have ranged within the 7%-10% vary.”
“Whereas a notable beat on NFP could have helped to catalyze a repricing in expectations, it’s not a essential situation for Gold costs to fizzle out. More and more lackluster value motion can also be decreasing the bar for CTAs to promote, with a giant downtape already prone to catalyze promoting exercise from pattern followers, even supposing Gold stays close to all-time highs.”
